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S&T and ATK Get Inside the Harley Dealer Network

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Practically no one saw this coming, or were even in the ballpark of predicting it, and I’m interested to see what the motorcycle press will make of it, since I’m sure that some of them, like me, have been aware of this for at least several weeks now, although the news has been embargoed, so no one could report on it.

As of today, the embargo has been lifted, and we are now free to speak about it.

First, the press release from S&T/ATK, makes the bare bones facts available.  S&T motorcycles, the Korean manufacturer of the Hyosung brand motorcycles will be working directly with ATK motorcycles, the US manufacturer of dirt bikes.  Together they will produce a motorcycle that will be largely produced in Korea by Hyosung and  assembled in the USA by ATK.  These ATK-badged motorcycles will be smaller displacement motorcycles that will be sold in selected Harley-Davidson dealerships.

Sources close to the deal tell me that ATK may also begin selling their off-road motorcycles in some Harley dealerships as well.  It is not yet entirely clear which of the ATK-badged Hyosungs will be made available to the Harley Dealers, although the new 700cc Aquila is a likely candidate.

Sources also tell me that it is possible–although exactly how possible is still unclear–for modified versions of the 250cc and 650cc cruisers and sportbikes, with new bodywork created by ATK, are candidates for those dealers who desire them, to help bring in the younger riders that Harley so desperately needs, as their current rider community is aging rapidly.

This is a coup for both ATK and S&T.  ATK now has a chance to substantially increase their penetration into the Harley-Davidson dealer network.  S&T has a chance to get deeper into the US Market–which has regarded their products with some suspicion due to confusing Hyosung with a Chinese, rather than South Korean company–by having their bikes branded with an American manufacturer’s badge.

It’s a bit of a coup for Harley dealerships, and possibly for Harley-Davidson itself–as well.  They will–or at least selected dealers will–have access to new lines of motorcycles to bring in younger customers.  This is especially true if the ATK dirt bikes can also make an appearance on dealer showrooms.

The hope is that everyone can win by making the dealerships places where a number of different product lines can be found, in order to bring in a wider, and one hopes, younger, group of riders through the door.

The full text of the press release is below the fold.

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Subject: “Korean OEM -S&T Motors meets American OEM –ATK at EICMA 2009 in Milan”

MILAN ITALY, November 10, 2009 – S&T Motors /“HYOSUNG” Motorcycles (KSE000040) of Korea announced today at a 2009 EICMA motorcycle show press conference that S&T will partner with ATK Motorcycles company on several important strategic projects. FWC is a newly born company from American motorcycle manufacturer ATK Motor Company Inc.

The goal of the partnership is to strengthen the competitive position of both companies and provide tangible benefits to customers, dealers, suppliers and shareholders. Each company will continue to be run separately, but will work together on several specific cooperative projects involving new product development, distribution, manufacturing, and purchasing.

“This partnership is a very natural fit for both of us.” added Dr. Taekwon Kim, CEO of S&T Motors Korea. Mr. Frank White, ATK CEO commented, “S&T and ATK complement each other well and we are very excited about our new relationship. By joining forces, we believe, we believe we can strengthen our distribution network, reduce our production costs, spread development costs and substantially accelerate our entry into the street bike business. We also look forward to sharing some of our off-road technology with S&T. The ATK and S&T management teams should work well together – both companies are driven by innovation, passion, quality and demand for success.”

“I believe this partnership will provide substantial benefits to S&T and ATK and both company’s dealers, employees, suppliers, and shareholders for years to come.” Said Taekwon Kim. “We have long admired ATK and are excited about working together to strengthen both companies. S&T can benefit from ATK’s substantial experience in the American motorcycle market and ATK’s presence inside the Harley Dealer network.”

According to Frank White, “there will be some differentiation between S&T branded products and the ATK branded products. S&T will send parts from Korea and we will integrate those with our own American and European parts. These American-Utah assembled motorcycles will be targeted to be sold through a select group of Harley-Davidson Dealers who are looking for a quality smaller displacement motorcycle to be sold under the US ATK brand name.” Frank White went further to comment, “The management at Harley-Davidson knows what we are doing with some of their dealers, however, they do not endorse our activities in any way.”

About S&T Motors Co., Ltd.

S&T Motors is the largest motorcycle manufacturer in Korea. Started in 1978, S&T has been manufacturing “Hyosung” branded motorcycles ranging from 250cc to 650cc, exporting to Asia, Australia, North & South America and Europe, totaling more than 60 countries worldwide. S&T Motors is to display a total of 15 models, including the GV700-Classic at the EICMA 2009 Motorcycle Exhibition. The GV-700 Classic was solely developed by S&T R&D Department. The features of this model include traditional cruiser styling, powerful engine, neutral handling, and comfortable riding position which makes it perfect for long distance cruising. S&T will focus on GV700-Classic sales and the bikes will be available in dealerships for 2010.

In addition to the GV-700 Classic, S&T Motors launched its first-ever electric scooters in Milan. Two units include the GEM-2.0 (2Kw) and GEM-4.0 (4Kw). The GEM-2.0 and GEM-4.0 will be available in late 2010.

About ATK:

ATK is best known for its racing legacy. The first ATK conceived in 1985 won the legendary Barstow to Vegas Off-Road Motorcycle Race and since then has won multiple AMA National off-road and Dirt Track Championships. ATK is the second oldest continuously running US motorcycle manufacturer and currently is the only US based off-road motorcycle manufacturer. Over the past 25 years ATK has manufactured over 15,000 Motorcycles / ATV’s with a small staff of individuals in the Salt Lake City Utah area. ATK has been a pioneer in innovation and technology advances including being the first motorcycle company to introduce fuel injection back in 1991. In 2003 ATK purchased all the parts from the publically traded Cannondale Motorsports Corp and for the past five years has focused on refining the platform and making it much more reliable.

ATK is a privately owned company with the two principle shareholders being; Frank White ATK CEO and Malcolm Zanca, owner and operator of multiple Harley-Davidson Dealerships. Zanca is also a former two-time Harley- Davidson Dealer Advisory Chairman. The balance of the shareholders being individual Harley-Davidson Dealers.

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