Benelli Back in Trouble

Financial problems return to Italian firm in global economic recession

DARK TIMES at Benelli. Many staff at the factory in Pesaro on Italy’s Adriatic coast are working part-time. Production has been scaled back to about 1000 bikes this year as the Chinese owners review the future of the still unprofitable marque.

It’s all a far cry from the positive view three years ago, when Benelli seemed to be well on the way to recovery under its new Chinese owners. Qiang Jiang is a huge Chinese company that sells more than a million scooters per year in its home market. In October 2005 it bought Benelli, whose previous owners, the Merloni Group, had developed the rapid Tornado 900 streetbike and raced it with some success in World Superbike before financial difficulties led to bills going unpaid and production being suspended.

The new Chinese owners paid off the debts, restarted production and introduced several new triples, starting in 2006 with the Tre1130K. Benelli produced several thousand bikes in 2007, and announced ambitious aims to increase that figure to 10,000 in 2008 and 20,000 this year. That was due to be achieved with new parallel twin and single-cylinder models led by the 754cc Due twin, which chief engineer Pierluigi Marconi created by chopping one cylinder off the triple motor.

A prototype Due was unveiled to generally positive response last year. But the twin’s development is still not completed, and meanwhile Benelli has been badly hit by the global downturn that has seen sales of existing three-cylinder models plunge, and dealers in many countries left with unsold stock. Many of the Pesaro workforce of over 100 are currently working part-time under the Italian cassa integrazione system by which part of their salary is paid by the government.

“The recent plan was to produce 5000 bikes this year, but we couldn’t achieve it,” says Gianluca Galasso, the former World Supersport racer who works as Benelli’s PR chief as well as helping develop the Due. “The Chinese owners understand the problems and there will be meetings soon to decide Benelli’s future.”

Moving production to China to reduce costs is not a serious option, Galasso insists. “Scooters will be built in China and motorcycles in Italy, apart from some low tech parts such as mirrors. At the moment Qiang Jiang doesn’t have the same quality and technical levels in China. What we can do is help them improve their quality and design to produce a better product.” Hopefully for Galasso and his colleagues, Benelli’s value to Qiang Jiang is based on more than just profitable motorcycle production. If not, the famous old marque’s future looks bleak.