The tantalizing photo mock ups of the OSSA 300i enduro captivated the world. The promise of so much new technology would have been enough to enthrall many. Yet it was really the visually fascinating design that sent the interest skyrocketing. Who cannot help but feel good by staring at this photo?
But such is the disparity between dreams and reality. Many months ago I talked along the same lines about the much hyped Husqvarna direct injection concept. I dubbed it the “silver bullet”. So strong was the impact of the BMW/Husky sales presentation upon the world media, the inference so absolute, the bike was expected in showrooms nearly any day. It was convenient to overlook the complete absence of proof in the form of a working model.
As for OSSA, over a year has passed and no progress is in sight. Looking at the greater economic picture for the Spanish motorcycle industry, it is easy to understand the problem. Motorcycle sales and production continue to lose ground, along with most of the European Union. Many EU countries appeared to have reached a lower stabilization plateau in 2009, with economic recovery in sight. But the reality is that most continue to see small erosion’s in production and sales. In numbers of units, Spain’s motorcycle industry has dropped 60% from the 2007 peak.
Production of Powered Two-Wheelers in Europe (1)
So how does this all relate to the recent sale of Husqvarna to KTM?
BMW made the purchase of Husky back around 2007. It was a far away time of economic riches. The off road market was booming. Buyers lined up to pay premiums for every KTM four stroke that could be produced. BMW wanted in on this pot of gold. They wanted in so much, a two pronged attack was devised. They would implement the develop of their own enduro line, the G450x, as well as purchase the next most attractive brand that could be found.
Cagiva had repeatedly found a means to make their properties unbelievably valuable on paper. Unbelievable being the key word, just ask Harley about their purchase of MV Agusta. The result was a net loss of 109 million dollars(2). The actual long term loss to Harley Davidson would be even greater once all the accounting was settled.
But soon, the Germans would own the last great Cagiva trademark, Husqvarna. Yet the underlying economic course has already begun to change. In hindsight, the marriage of the German and Italian marques seemed rocky from the start. BMW made large strategic investments in the Italian infrastructure. This type of investment would take years to manifest new models that could reach dealer floors.
In the meanwhile, sales lagged as aged dirt bikes needed to be pushed upon tech conscious buyers. The situation became no better as BMW abandoned its own 450 enduro project and delegated it to the Italians. I can only imagine the boardroom conversation as the German brass hands the Kymco produced motor package to the Italian engineers and says ” you have 9 months to give us a new motorcycle using this motor.” Of course I am purely speculating here, but I don’t think it is too far off base.
As the off road economy continued to head south, BMW was quick to see the writing on the wall, but was faced with a dilemma. How were they to make the best of the situation? Any decisions would have to be in keeping with the greater BMW corporate path. Looking back, it now seems the choice was to move away from the enduro market try to re-position Husqvarna as something more like a sister brand to BMW, one that would share the same technology and direction, but with its own unique flare.
The machine was set in motion to make Husky a street bike company, charged by BMW power plants. Concept after concept was paraded before the media to generate momentum. Interestingly enough, much of the plan seemed to be working. Certainly no other company has received more free publicity from the motorcycle press in years.
Sadly, the reality was that for all this media hype, there was very little talk of new dirt bikes. Actually, I should rephrase that. There was plenty of talk and backroom whisper of cool new things such as direct injection two strokes. But compared to the mock-up models of rebadged BMW street bikes, there was very little hard evidence that Husky dirt bikes would be filling the start gates at the local track any time soon.
At some point BMW decided it was best to stick to the knitting, to do what they already do so well. They divested themselves of Husqvarna and it is now a KTM brand. What the future can hold is only a guess. I would venture to say that many of the recent design concepts will be canned. I don’t see KTM using BMW motors. One possibility has occured to me. Husky could become the the “third world” brand of KTM/ Bajaj group. This would allow them to expand their cooperation, but in a way that would avoid potentially diluting the KTM brand name due using it on second tier products. Bajaj currently produces a range of models in India, marketed under the KTM brand name.
Here is where our story comes full circle. KTM has invested huge amounts of money in their newest motor designs. It has been no real secret of their desire to recoup that investment cost by using the motors in as many platforms as possible. The 350 Freeride is a great example of this. It is a model purposely designed to extend the sale of motors. The model would probably be better suited to a 300cc two stroke motor. But they need to sell more 350 twin cam motors to amortize the development costs.
Investment costs of new designs are such that they might encourage a large company like KTM to add another marque, just to further spread out development costs. It seems obvious that a middle ground company like Husqvarna was unable to bear such new design costs and BMW was hesitant to commit their vast resources to it.
Now think about those same challenges for a start up such as OSSA. How could they possibly find a way to make an economic reality out of such an innovative and challenging design concept as the 300i enduro?