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Proton Selling MV Agusta Motorcycles
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this isn't too surprising...
proton lost a significant amount of money through its mv agusta investments. from what i can tell, it looks to be in the neighborhood of $250 million since last december.
my guess is that the bleeding at mv is not over.
this is from the malaysia sun, dated nov 30, 2005.
PROTON Holdings Bhd yesterday posted a big loss for its second quarter and announced the appointment of Perodua Auto Corp executive director Syed Zainal Abidin Syed Mohd Tahir, 43, as its new managing director.
Apart from Zainal Abidin, who will take over as MD from Jan 1, Proton also named a new management team that would see Datuk Kisai Rahmat, currently joint chief operating officer, appointed executive director of its engineering and manufacturing division.
Syed Zainal Abidin
For its second quarter ended Sept 30, Proton posted a net loss of RM154.3mil, or 28.1 sen a share, compared with a net profit of RM198.9mil, or 36.2 sen a share, in the same period a year ago. For the first quarter, its net loss was RM12.4mil.
Revenue fell to RM1.8bil from RM2.2bil and the loss before tax stood at RM158.8mil compared with a profit of RM241mil previously.
For the half year to end-September, Proton made a net loss of RM166.7mil compared with a net profit of RM365.4mil a year ago.
Proton chairman Datuk Mohammed Azlan Hashim attributed the losses to the rise in component prices, reduction in margins and the RM160.7mil in provisions arising mainly from the company's Italian subsidiary, MV Agusta.
He told a media conference in Shah Alam that RM90mil of the provisions were related to doubtful debts as well as purchases made under a supply agreement.
The provisions were also for 3,000 engines in its inventory whose warranty had lapsed, and RM36mil for a mismatch of warranties between international customers and domestic component suppliers.
Azlan said that since buying a controlling stake in MV Agusta in December last year, Proton had spent an additional RM500mil on the Italian subsidiary as a result of losses and write-offs. And although Proton does not expect any more provisions for MV Agusta, the company was “taking a long look to see whether to invest in this company''.
“At the time of purchase in December last year, Proton saw MV Agusta as an opportunity to gain access to a global brand and access to engineering and design expertise,'' he said, adding that from a financial perspective, the investment had “not met expectations''.
Lotus Group is still loss-making but Azlan said its businesses in Australia, Singapore and the UK were either showing signs of improvement or performing “reasonably well''.
proton lost a significant amount of money through its mv agusta investments. from what i can tell, it looks to be in the neighborhood of $250 million since last december.
my guess is that the bleeding at mv is not over.
this is from the malaysia sun, dated nov 30, 2005.
PROTON Holdings Bhd yesterday posted a big loss for its second quarter and announced the appointment of Perodua Auto Corp executive director Syed Zainal Abidin Syed Mohd Tahir, 43, as its new managing director.
Apart from Zainal Abidin, who will take over as MD from Jan 1, Proton also named a new management team that would see Datuk Kisai Rahmat, currently joint chief operating officer, appointed executive director of its engineering and manufacturing division.
Syed Zainal Abidin
For its second quarter ended Sept 30, Proton posted a net loss of RM154.3mil, or 28.1 sen a share, compared with a net profit of RM198.9mil, or 36.2 sen a share, in the same period a year ago. For the first quarter, its net loss was RM12.4mil.
Revenue fell to RM1.8bil from RM2.2bil and the loss before tax stood at RM158.8mil compared with a profit of RM241mil previously.
For the half year to end-September, Proton made a net loss of RM166.7mil compared with a net profit of RM365.4mil a year ago.
Proton chairman Datuk Mohammed Azlan Hashim attributed the losses to the rise in component prices, reduction in margins and the RM160.7mil in provisions arising mainly from the company's Italian subsidiary, MV Agusta.
He told a media conference in Shah Alam that RM90mil of the provisions were related to doubtful debts as well as purchases made under a supply agreement.
The provisions were also for 3,000 engines in its inventory whose warranty had lapsed, and RM36mil for a mismatch of warranties between international customers and domestic component suppliers.
Azlan said that since buying a controlling stake in MV Agusta in December last year, Proton had spent an additional RM500mil on the Italian subsidiary as a result of losses and write-offs. And although Proton does not expect any more provisions for MV Agusta, the company was “taking a long look to see whether to invest in this company''.
“At the time of purchase in December last year, Proton saw MV Agusta as an opportunity to gain access to a global brand and access to engineering and design expertise,'' he said, adding that from a financial perspective, the investment had “not met expectations''.
Lotus Group is still loss-making but Azlan said its businesses in Australia, Singapore and the UK were either showing signs of improvement or performing “reasonably well''.
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I'm not much of a business person but something does'nt add up right here.
The company was in debt when purchased and how quickly were they going to turn this around? I'd like to see some of those projected figures and time frames.
Let's have three cheers for management who obviously deserve their positions at Proton and MV...
3000 engines out of warranty RM36mil for mismatch in warranties etc... costing roughly the RM160mil loss they posted which is attributed to MV but what about the other net RM365mil that's missing.
It's also annoying when they say that Lotus is still loss making and only showing signs of improvement while MV has had a substantial increase in its sales worldwide and will the one sold off.
Personally I hope this is a blessing in disguise for MV.
The company was in debt when purchased and how quickly were they going to turn this around? I'd like to see some of those projected figures and time frames.
Let's have three cheers for management who obviously deserve their positions at Proton and MV...
3000 engines out of warranty RM36mil for mismatch in warranties etc... costing roughly the RM160mil loss they posted which is attributed to MV but what about the other net RM365mil that's missing.
What sort of bullshit is that? Just what were they expecting?
It's also annoying when they say that Lotus is still loss making and only showing signs of improvement while MV has had a substantial increase in its sales worldwide and will the one sold off.
Personally I hope this is a blessing in disguise for MV.
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Here was my post on this into yahoogroups:
This has been building for a while eh? I have a news feed on MV and there has been a lot of talk in Malaysia, not about MV so much (although it is always mentioned) but why Proton is in bad shape. I'd say it has been addressed weekly since Sept in their press. It seems they have made a number of provisions outlining their debt:earnings but those were expected with the MV purchase. What wasn't expected was their lack of competition in their domestic car market. Model lines that were well aged as well as the new cut on luxury tax for imported cars were both cited. So it is not ALL MV's fault. There is a lot of speculation that their provisions were outlined to help shore up the books for the partnership or takeover by another manufacturer. I think we've all heard VW linked to them. It could be that the sale of MV is part of that.
I hope this transition is smooth. One good thing is that with each change of hands more and more previous debt will be written off so the next person isn't starting so far under. I had some hope that given the VW interest they would align MV under Audi/Lambo/Bugatti and compete with BMW Motorrad but under that arm's "sporting" pretensions.
James
This has been building for a while eh? I have a news feed on MV and there has been a lot of talk in Malaysia, not about MV so much (although it is always mentioned) but why Proton is in bad shape. I'd say it has been addressed weekly since Sept in their press. It seems they have made a number of provisions outlining their debt:earnings but those were expected with the MV purchase. What wasn't expected was their lack of competition in their domestic car market. Model lines that were well aged as well as the new cut on luxury tax for imported cars were both cited. So it is not ALL MV's fault. There is a lot of speculation that their provisions were outlined to help shore up the books for the partnership or takeover by another manufacturer. I think we've all heard VW linked to them. It could be that the sale of MV is part of that.
I hope this transition is smooth. One good thing is that with each change of hands more and more previous debt will be written off so the next person isn't starting so far under. I had some hope that given the VW interest they would align MV under Audi/Lambo/Bugatti and compete with BMW Motorrad but under that arm's "sporting" pretensions.
James
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I just stopped by an Atlanta dealer while i was working down there and the guy said the new 910 brutale's are going like crazy as well. people are bring in their old 750's for the new 910's. Overall he said that MV was still stingy with all the literature but the bikes are selling very well. They sold 3 Tambo's this year not to mention a number of F4's. There is so much red tape i think it won't be till after they are kept or sold that we know how much they are losing or gaining b/c of MV. JMO.
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mv brand
mv has done a good job with brand identity to this point. and the strong sales indicators are a positive, but...
is the company profitable? who knows what the manufacturing costs for them are? and then there is advertising, testing, quality control, dealer support, and so on...
i doubt mv is making money. according to the article i saw in roadracing world, mv withheld sales of the f4 from california until they had a tank redesign that incorporated the carbon cannister (required for ca bikes). i think that's great from a design and engineering standpoint, but it just moves out the time to market, which is hugely expensive. not sure if that's a sound buisness decision.
as much as we all want a the company to be run by uncompromising motorcycle purists, they need to make good business decisions. otherwise, we may not have an mv brand to get excited over!
alex
mv has done a good job with brand identity to this point. and the strong sales indicators are a positive, but...
is the company profitable? who knows what the manufacturing costs for them are? and then there is advertising, testing, quality control, dealer support, and so on...
i doubt mv is making money. according to the article i saw in roadracing world, mv withheld sales of the f4 from california until they had a tank redesign that incorporated the carbon cannister (required for ca bikes). i think that's great from a design and engineering standpoint, but it just moves out the time to market, which is hugely expensive. not sure if that's a sound buisness decision.
as much as we all want a the company to be run by uncompromising motorcycle purists, they need to make good business decisions. otherwise, we may not have an mv brand to get excited over!
alex
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593 Posts
why do i have the feeling whoever buys it is going to ruin the brand......
I HOPE TO GOD they don't try to mass market the brand and lose it's exclusiveness by lowering prices and build quality. No Asian buyers again........
Would buy it myself if I could (obvious statement of the year).
I HOPE TO GOD they don't try to mass market the brand and lose it's exclusiveness by lowering prices and build quality. No Asian buyers again........
Would buy it myself if I could (obvious statement of the year).
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