MZ PRESS RELEASE JUST OUT, WHAT YOU THINK? BYE ANDY

[mzsrus]

As part of further efforts to reduce costs in order to ensure the survival of MZ, a decision was taken at the end of November 2006 to close down MZ Engineering GmbH and put in place a new strategy to enable the MZ products to be developed in a more cost efficient and productive manner. This will involve, but not limited to, the outsourcing of work and purchasing of developed sub-system that is readily available in the market.

This will not affect the ongoing business of MZ Motorrad-und Zweiradwerk GmbH, which will continue with its operation in Zschopau with the production of the 125cc, 1000cc, 660 Supermoto and the Charly.

In order to increase the brand awareness, various marketing activities for the season 2007 have already been planned. Amongst others, these are e.g. the participation in the regional German fairs and the revival of the popular Sachsenbike Tours on MZ motorcycles through the Erzgebirge.

MZG has also undertaken a capital reduction exercise, which is currently on going. This exercise will restructure the company's balance sheet so that the company

[keithcross]

So what exactly does this mean?

Keith

[LWS66]

As an owner of an MZ sportbike, and looking at MZ as a large bike builder, I really hope things turn for the better, but anytime you read about things like this it usually means that a company is dying a slow death. You've just got to face reality regarding MZ's fortunes and future. I can't recall many companies that end up back on solid ground and churning out profits, growing sales etc after having been where MZ is. And MZ ain't Triumph or Harley, they'll never have that kind of success. And what they did in the U.S. can never be repaired.... as far as financialy stable, reputable, quality dealers are concerned. Not anytime soon at least. And a small time dealer won't take on something that does'nt move....many have been screwed with the pullout. I think all bridges have been burned on that front. Fact is, there is no "profitable" MZ market in the U.S. or the U.K. I don't believe the rumors going round that they intend to re-enter the U.S. market.....with what? Maybe little commuters, but certainly no more large sportbikes of any sort. What, with the first go-round of bikes still languishing on showroom floors? Who's going to take on more?
Any owner of an MZ is a little different from the norm and knows that it's a fine machine, but beyond that there are'nt enough like minded people, there just is'nt a market (other than Germany) to make it worthwhile. I think that's the reality.
And the next thing we'll read is that production has been transfered to Malaysia, China, or some other reborn Asian country completely! We already have enough or that stuff, along with Korean made bikes. MZ would just be another face in the crowd, if cheap little commuters is what they want to sell...but in reality that's probably their best bet, not building unique sportbikes.
"All" MZ's should be engineered and built in Germany regardless, period! That was one of the main reasons I (as well as others) chose an MZ. I have no interest in something engineered in Malaysia, produced in China or some other third world country. Never!

[keithcross]

While I agree with your comments above as a whole the market in the UK may be savagable as MZ did not have an official importer The main reason for their bikes not selling here has been lack of advertising and no idividual business to take this up.

Keith

[LWS66]

I don't know much about the U.K. market, kinda assumed on that one!! But based on a few people that have posted here and many of the British mags I read and their complete lack of any mention of MZ what-so-ever, it is obvious it can't be good either. I just picked up the feb issue of Bike where they do a story on different engine designs. "The Search For The Perfect Engine" it's called. Singles, v-twins, triples, in-line fours....and parallel twins to see what each motor designs attributes and pitfalls are. They use the old ancient Yamaha TDM900 for the parallel twin, with only a small mention of the new BMW 800. No mention of the MZ 1000 and it being the most powerful parallel twin to date, and it's available right in their own back yard in two versions! There is no doubt that it would have been, at the least, anywhere in the top four of each category. Seems like it's been completely forgotten! Obviously no marketing


[quote="keithcross"]While I agree with your comments above as a whole the market in the UK may be savagable as MZ did not have an official importer The main reason for their bikes not selling here has been lack of advertising and no idividual business to take this up.

Keith[/quote]

[Drew]

The way I see it, this announcement is an admission that all future engineering work will be either outsourced or by contract, if there is to be any further design at all. No doubt this is a repercussion of the flat sales figures of the parallel twin, which is too bad as it is a well-designed motor in an attractive chassis.

So MZ is probably going to go in one of a few directions, but the sentiments of a slow death seem probable. One scenario is MZ will continue to offshore its manufacturing, following the business model of Royal Enfield.

My dream would be a buyout by a company that would make use of the line. The Germans and Austrians wouldn't really be interested, as BMW and KTM already have lineups that compete in the same market space. The Big 4 Japanese brands tend to look inwards, and again compete in similar market space (all have ~650cc models that could be easily converted to Super Moto spec for a lot less effort than a buyout).

So who would gain from an MZ buyout? Obviously a company that has no dirt lineup, or a company wanting to break into the big-bike sector. The MZ 1000 is a bit of a lame duck in almost any buyout scenario (every manufacturer has a 1000cc model, so their parallel twin doesn't add much value). The exception to that would be Derbi, who just released the Mulhacen, but that's as big as they go for their line. Plus their experience with the Minarelli motor can be directly applied to the MZs.

As for firms with no dirt lineup, I'd guess the best fit would be Triumph. Here's my reasoning- Triumph's small-engine or dirt lineup is non-existent (Scrambler notwithstanding). An updated and redesigned Black Panther/Baghira could pass as an intro Tiger. Triumph can continue to sell the 125s in Europe where they can build brand-loyalty with new riders. Plus they have a solid distribution network in both Europe and North America (which would help rebuild the reputation MZ earned by MZNA's earlier actions of a few years ago).

Any questions of sourcing Yamaha motors can be easily taken care of by using any other ~650cc source (Minarelli and Rotax come to mind), plus this allows introduction of FI to the lineup to pass increasingly stringent emissions regulations. This will require the use of an engineering team, which any potential buyer probably will have in place already.

[drj]

good things never last.
the center does not hold.

what a bummer.

drj