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Last Updated: Friday, 21 November, 2003, 05:49 GMT
Proton to buy superbike maker MV Agusta

By Jorn Madslien
BBC News Online reporter at the motorbike show

MV Agusta
The 166bhp engine has been developed by the car maker Ferrari.

The Malaysian car maker Proton is in talks to buy a 50% stake in the Italian superbike maker MV Agusta, according to a Proton official.

The two companies have entered a three month period during which they will explore whether a deal is desirable, Proton's Roger Mercer told BBC News Online.

"My understanding is that MV Agusta is in [controlled] administration at the moment, so no wonder that they are looking for a controlling partner," he said.

Under Italian law, being in controlled administration means MV Agusta's future is guaranteed for four years, during which time suppliers can continue delivering parts without fear that they will not get paid, according to its UK importer David Perceval, import sales manager, Three Cross Motorcycles.

Ferrari engine

MV Agusta is remaining tight-lipped about any potential deal, according Mr Perceval.

Lotus Elise
Proton, which already owns Lotus, clearly likes sporty Europeans
"But having a large backer like that would obviously be a good thing."

"The company needs a more secure financial situation," Mr Perceval said.

"It has eminently sellable products, demand constantly outstrips supply."

MV Agusta, whose stunning Italian designer bike, the 12,500 F4 1000, is on show at the Birmingham Motorcycle & Scooter Show at the moment, is already linked with the car industry.

The motorcycle's 166bhp engine has been developed by the car maker Ferrari.

Asian market

Proton is keen to develop closer links with MV Agusta and its Husqvarna and Cagiva brands.

These might be ideally suited to help the car maker diversify into motorcycles, to take advantage of an anticipated sharp rise in demand in Asia where, as a rule, supply is very limited when compared with Europe and the US.

In the UK, for example, motorcycle buyers can chose between up to 250 different models, while in some countries in Asia there are less than a handful of different bikes on offer, an official from a Japanese bike builder explained.

Sporty

Proton already owns the British sports car and engineering company Lotus.

The car maker is taking full advantage of Lotus' technical expertise and bold design skills, while offering cash injections aplenty in return.

Lotus is deeply involved in the development of all of Proton's cars, said Mr Mercer.




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