COVID-19 and the Italian motorcycle industry

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The Alp 2.0 (photo: Beta)

Many CMGers will remember Michael Uhlarik, who penned quite a few articles for us a while back. He’s been a true industry insider for many years, working as a motorcycle designer. These days, he’s been working on clay modelling a new model for an Italian manufacturer, which means he was working in Italy, and has just returned with a first-hand glance at the impact COVID-19 has had on that country. 

He’s now under self-quarantine with his family in Nova Scotia, so we called him up yesterday for a chat.

The Italian motorcycle industry is shut down, period

“Everything’s closed. Every single factory is closed.”

Although not everyone has sent out a press release with details on plant closures, Uhlarik says the government’s restrictions mean there’s no manufacturing going on, and only the plant offices are open.

“It’s not up to the companies, the government has shut down these facilities. You can go to work, but you cannot go to work in groupings of more than 10.”

While every company is functioning at some level with minimal staff, Uhlarik says every factory in Italy is closed.

That means factories can’t operate, he says, although the companies are still in business, with skeleton crews shipping out what they can.

“The companies aren’t on break, where nothing’s happening. It just means that they’re working from home and the very bare minimum number of people are in the office, but all factories are closed.”

The manufacturers are taking it all very seriously, says Uhlarik, because a single case of coronavirus infection at one major manufacturer was enough for the entire factory to close down, and thousands of staff were sent home.

The Italian shutdown means other Euro OEMs are also shutting down

“Most of the subcontractors for motorcycle production in Europe, that are still made in Europe, are Italian and Spanish,” says Uhlarik. And that means, if Italy’s shut down (and Spain’s pretty much there as well), then nobody else can build bikes.

The Italian shutdown is affecting the other European OEMs, says Uhlarik.

Many of these are names that Canadian motorcyclists might not be familiar with, like EIE, an Italian company that makes lighting systems for most high-quality European motorcycles. Other companies that are better-known, like PIAA, or Phillips, or Minarelli, or Magneti Marelli, or Brembo, or Piola, they’re all on hiatus as well.

“The European motorcycle industry is not building anything. Suppliers are all closed,” Uhlarik says. “If Verlicchi’s not making frames, nobody’s shipping bikes.”  

For now, Japanese production sounds to be okay

We’ve heard the same basic message from Japanese companies so far: We’re monitoring things, but for now, production rolls on. Uhlarik says this is because those companies rely on subcontractors in Thailand and Vietnam, and those countries haven’t been affected severely by COVID-19 at this point.

If production requires parts from Europe, then there will be a problem. That’s affecting Euro brands that are manufactured in Asia, as they tend to have either Chinese or European supply chains and both those are disrupted now. The Japanese have avoided much of that trouble.

Things will be tough, but this should be a great year for motorcyclists

Despite some difficulty getting out of Italy, Uhlarik says the in-country situation was peaceful, though disrupted. With major highways sealed off, and police blockades on secondary highways, everyone was still polite and handled the situations calmly, he says, and in cities, there was no looting or significant amount of hoarding — Uhlarik said he saw “nothing but the best of people.” Still, he doesn’t sugar-coat things and believes there are tough days ahead for the North American public.

A recession will hurt dealers badly, but will provide good deals on leftover 2019 models in coming weeks, says Uhlarik.

This summer, he says Canadian riders will notice holes in the supply chain for made-in-Italy equipment: “If you want that new AGV carbon helmet, if it’s out of stock, you’re not getting it.”

He believes the ongoing economic upheaval will be tough on dealerships, but if a motorcyclist does have money to spend, there are likely to be good deals on leftover 2019 models (2020 models may be hard to find).

“New bikes are going to be massively discounted, because the recession is going to suck. It’s going to be deep. If you’re a dealer, it’s going to suck. A lot of dealers are going to go under, it’s no question. It’s going to be fire-sale o’clock in about a month’s time, just when they should be gearing up for their best sales.”

The flip side is, he figures many riders are going to spend more time riding, as they’re less tied down with other responsibilities, and also because they just may figure out that participation in the rat race isn’t working out.

Some OEMs are facing financial disaster

While some companies, particularly the Big Four, are diverse enough to survive another recession, Uhlarik believes companies with an emphasis on recreational products are going to suffer badly this year. “That guy who’s got two outboards on his bass boat, and is thinking about upgrading — he’s not upgrading.” That holds particularly true for companies with a focus on high-dollar motorcycles, he figures. The market just won’t be there.

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