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HOT NEWS – January 24, 2005

Piaggio & C. SpA ended 2004 by completing its total acquisition of Aprilia SpA, creating a group with annual sales of more than Euro 1.5 billion ($1.9 billion).
The contract, signed Dec. 28 with Aprilia shareholders Ivano Beggio and his family, Holdipar s.r.l., European Moto Holding s.a.r.l. and Scarabeo s.s., involves Piaggio putting in Euro 50 million of new capital for Aprilia, opening a credit line for Euro 78 million, and taking on Aprilia’s bank debt of Euro 98 million. Piaggio also agreed to compensate Aprilia’s former shareholders with Euro 20 million in unspecified “financial instruments,” as well as repay Aprilia’s Euro 100 million bond maturing in May 2005.
The new group becomes the world’s fourth largest producer of two-wheelers. It includes brand names Piaggio, Vespa, Gilera, Derbi, Aprilia and Moto Guzzi. European Union regulators approved the deal in November, once Piaggio agreed to offer its 50cc four-stroke engine to other manufacturers at fair market price.
“The new group has one of the most complete and diversified product ranges on the market, from 50cc scooters to 1000cc motorbikes, with a 24% market share in Europe and 35% in Italy, eight industrial plants worldwide, six research and development centers, and 6,000 employees,” Piaggio CEO Rocco Sabelli said in a prepared statement. “We wish to maintain our ability to compete: the inclusion of the Aprilia Group in Piaggio will make our presence in key markets more incisive and will allow us to further increase and develop our investments in technological and productive innovation.”
In a related matter, Immsi SpA revealed that it had become the leading shareholder of the Piaggio group’s holding company, the Dutch-registered Piaggio Netherland BV, by raising its direct and indirect stake to 40% from a previous 31.25%. Immsi is an investment vehicle controlled by Piaggio Chairman Roberto Colaninno.

The Executive Council of Ancma, the Italian Association of Bicycle, Motorcycle and Components Manufacturers, has voted to make the International Bicycle and Motorcycle Exhibition of Milan (EICMA) a yearly event starting in 2005.
Sixty-three years old in 2005, EICMA was held yearly until 1957, when it became a biennial event. While the show will again become a yearly event, organizers have split the bicycle industry from the motorcycle industry and offered each market separate dates: The bicycle industry showcases Sept. 16-19; the motorcycle industry showcases Nov. 15-20.
The executive council of Ancma passed the resolution with a unanimous vote.
The New Milan Fair Center, designed by architect Massimiliano Fuksas, will house both shows. The new structure features a network of eight pavilions providing a total gross exhibit area of about 345.000 covered sq. meters, equal to 200.000 net sq. meters.
Other features include 74 meeting rooms; 13 visitors reception areas; 2.000 sq. meters of office space; 14 restaurants, seven banquet areas and 50 bar cafés. An additional 60.000 sqm of exhibit space is available outside.
Representatives of Ancma, the organizer of EICMA, will be located in Booth #2235 at the Dealer Expo.

American Suzuki will expand its visibility at Wisconsin’s Road America by providing motorcycles for the new Suzuki Supermoto School; participating in a new, ATVs for the year-around Suzuki ATV Adventure Program at the racetrack; and advertising its name on a spectator bridge.
The new supermoto school, the ATV program and bridge are slated to be in operation for the 2005 season. Terms of the deal were not disclosed.
The Suzuki Supermoto School is the first of its kind in the United States and will use the facility’s Briggs & Stratton Motorplex asphalt track plus a dirt segment.
“The Suzuki ATV Adventure program is a significant expansion for our group and corporate programs and will allow us to showcase Suzuki’s off road equipment as well as provide more choices for enthusiasts,” said George Bruggenthies, Road America president and general manager.
Road America hosted its first race in 1955 and will celebrate its 50th Anniversary in 2005.

Japan produced 196,180 two-wheelers during November 2004, up 51,247 units or 35.4% compared to the 144,933 units produced in November 2003, according to the Japan Automobile Manufacturers Association (JAMA). The organization also reported production from January 2004 through November 2004 was 1,646,165 units, down 29,612 units or 1.8% as compared with the production of 1,675,777 units recorded during the same period of the previous year.
Yamaha produced 85,413 units during November, Honda produced 44,715, Suzuki produced 41,769, Kawasaki produced 24,251, and a collection of others produced just 32 units.
The Japanese manufacturers exported 147,646 units during November 2004, up 22,506 units or 18.0% compared to 125,140 units exported during November 2003. The total value of motorcycles exported during the month was $592.14 million, including $486.27 million for vehicles and $105.87 million for parts.
JAMA said Yamaha exported 73,072 units during November, Suzuki exported 29,809, Honda exported 26,852, and Kawasaki exported 17,913. A total of 51,264 units were shipped to the United States while 4,134 units were sent to Canada.

Japan’s Yamaha Motor Co., Ltd. said it will set up a company in Hanoi, Vietnam, to produce engine parts for motorcycles.
The new company, called Yamaha Motor Parts Manufacturing Vietnam Co., Ltd. (YPMV), will be capitalized at $14.3 million and will be a 100% subsidiary of Yamaha Motor Co., Ltd.
The new factory is expected to have an annual production capacity of one million die-cast motorcycle engine parts, including cylinder heads, and 900,000 steel parts, such as gears and transmissions. The company will have 540 employees, and the business plan for the first year of operations calls for sales of $20 million.
The Vietnamese government granted approval for the company’s establishment Jan. 4, 2005. Construction is scheduled to begin in February 2005, and operations are slated to begin in January 2006.
Yamaha Spanish Sales Up
Yamaha Espana, the Spanish division of Japan’s Yamaha Motor, posted sales of Euro 318 million ($414.2 million) in 2004, up 41.3% compared to sales during 2003. The company said it manufactured more than one million motorcycles at its Spanish plant, which is located near Barcelona.

Dr. Christoph Baumgaertner has joined MZ Motorrad und Zweiradwerk GmbH as director of sales, marketing and product planning. The move was effective Jan. 1. Baumgaertner served as MZ engine development project manager from 1995 to 1996.
MZ recently introduced its long-awaited twin-cylinder MZ 1000S sport bike (MSRP $10,995). MZ brand motorcycles are imported and distributed in the United States by Motorrad of North America, 771 Fentress Blvd., Ste 22, Daytona Beach, Fla. 32114. For more information, visit www.motorradna.com.

A Beijing court has ordered a Chinese motorcycle manufacturer to pay 1.47 million yuan, approximately $177,607, in damages to Japan’s Honda Motor Co. for placing “Hongda” logos on its product.
Chongqing Lifan Industry Group is the fourth largest cycle producer in China and reportedly produced 825,000 units in 2003. Chongqing Lifan used Chinese characters for “Hongda” in the name of the company in the past, but changed its name in 2001 after protests from Honda. Although the company removed “Hongda” from its name, it continued to use the “Hongda” logo on its product, which led to Honda filing legal action in July 2002.
The products in question were marketed in China and other countries in Southeast Asia.

The nation-wide Ride for Kids program wrapped up 2004 by breaking its own fundraising record for the 21st consecutive year, raising $3.8 million during 29 events designed to fund the Pediatric Brain Tumor Foundation’s (PBTF) research and family support programs.
To date, the PBTF has raised $27 million to battle the deadliest of all childhood cancers.
Each motorcyclist who attends a Ride for Kids event brings a minimum donation of $35. Top fundraisers in 2004 were Scott and Mary Jo White of Phoenix. The Whites raised $67,000. The Top Chapter/Club award went to the Gold Wing Road Riders Assoc. (GWRRA) IL-G2 in Gurnee, Ill. Members of that club raised $102,558.
For 2005, the Ride for Kids program will be in 36 cities, including for the first time, Cleveland, Las Vegas, Philadelphia, Portland, Salt Lake City, San Diego, and Sunrise, Fla. Information on the complete 2005 Ride for Kids program is available at www.rideforkids.org or by calling 800/253-6530.

Custom officials in Southwest China’s Chongqing municipality say the city’s motorcycle exports to the United States between January and October 2004 totaled $22.84 million, an increase of 240% compared to the same period in 2003, reported China’s Xinhua news service.
Exports to Britain, Germany and Sweden were valued at $5.13 million, $1.39 million and $1.28 million dollars, respectively. The majority of the cycles exported were 50cc to 150cc in size.

Thomas A. Dattilo, CEO of Cooper Tire & Rubber Company, Findlay, Ohio, has been named Industry Executive of the Year by Rubber & Plastics News, an industry publication.
Dattilo has served as the chairman, president and CEO of Cooper Tire & Rubber Company since April 2000, in addition to serving as chairman of the Rubber Manufacturer’s Association (RMA) and vice chairman of the Manufacturer’s Alliance (MAPI).
Identifying Dattilo as the first “outsider” to lead the company, the magazine noted that he has provided the company “international experience and a better understanding of outside forces that influence companies in today’s economy.”
Cooper’s products include automotive, motorcycle and truck tires, inner tubes, tread rubber and equipment, as well as sealing, trim, NVH control systems and fluid handling systems. Cooper has more than 20,000 employees.

The S&S/American Iron Old School Shovel Tour kicks off March 9 at the Broken Spoke Saloon in Daytona Beach, Fla. Five builders have been chosen to create five unique and affordable customs based on the new S&S 93", alternator/generator, shovelhead-style engine.
The builders are Kevin Alsop of Big Bear Choppers, Big Mike of BMC Choppers, Chica of Chica Customs, Jesse Rooke of Jesse Rooke Customs, and the Indian Larry Legacy, which consists of Paul Cox and Keino.
For details, visit the S&S Cycle web site, www.sscycle.com, for more information.

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