Gas Gas must be doing something really wrong financially, They are the longest established, They sell more bikes than any other brand's.

Is there any hope for the new brands if the big boys in the market can not make it work?

http://www.gasgasmotos.es/en/news/481-gas-gas-motos-sa-and-ossa-factory-sl-join-for.html

I came across this some time ago and at the time was surprised to see the join up described as a merger.

Sales 9000 bikes a year say at an average of £5000 each (wholesale) = £45m

24m Euro Debt at 1.0% interest is 240,000 Euro, divide that by 9000 bikes and that is only 27 Euros per bike, hardly significant even if the interest rate rose a few percent.Even to pay off the capital of 24m Euro in 25 years would only add about 110 Euro per bike.

Debt repayment / servicing probably makes up a higher proportion of sales cost on many products. 140 Euros on a £5000 bike is only about 2%. I know of many projects where the debt repayment is far higher than that.

Of course it may be that the creditors have problems of their own and need the money out, but forcing GG into bankruptcy will probably not solve that.

If GG did go Piebernat could set up a nice little sideline using the low batch number manufacturers he uses to supply his Jgas operation.

Its clearly two things, Spain is still struggling financially and this is reflected in sales/credit available.

As the debt is increasing a line must be drawn.

What I cant get my head round is that (with economies of scale) if GG dont make money no one does? How do any of them keep going?

Did they really sell 9000 bikes in 2014?

Maybe GasGas are too big for the amount of bikes they sell,their wage bill and costs of supporting WTC and WEC teams must be a factor . Ive also noticed less new GasGas around over the last couple of years ,there's more Shercos and Betas with a few Ossas,Montesa and Jgas all competing for the same market .I think GasGas have got some big questions to answer

Is there any accurate new bike sales data, for Trials bikes?

It would be a shame to see such a well respected brand falter

Edited January 22, 201511 yr by johnnyboxer

http://www.gasgasmotos.es/en/news/481-gas-gas-motos-sa-and-ossa-factory-sl-join-for.html

I came across this some time ago and at the time was surprised to see the join up described as a merger.

Sales 9000 bikes a year say at an average of £5000 each (wholesale) = £45m

24m Euro Debt at 1.0% interest is 240,000 Euro, divide that by 9000 bikes and that is only 27 Euros per bike, hardly significant even if the interest rate rose a few percent.Even to pay off the capital of 24m Euro in 25 years would only add about 110 Euro per bike.

Debt repayment / servicing probably makes up a higher proportion of sales cost on many products. 140 Euros on a £5000 bike is only about 2%. I know of many projects where the debt repayment is far higher than that.

Of course it may be that the creditors have problems of their own and need the money out, but forcing GG into bankruptcy will probably not solve that.

If GG did go Piebernat could set up a nice little sideline using the low batch number manufacturers he uses to supply his Jgas operation.

1% intrest is not realistic. Thats even bellow government bonds. Risk=higher expected return, so no inverster would do that.

I dont know about Spain, but I would expect more close to 0.04-0.06 (and even higher for small firms).

Also keep in mind that the interest has to be paid each year, if they are not able to pay of the debt. (which is tax deductable, which can be a pro if you are able to make profit). I dont know how much money if from government?

I think its a combination of factors. Gg buys a lot of parts from other companies, which are also in some struggle because of the economic conditions. The factory is too small in numbers produced to be really efficient. GG has high costs for development of their product range compared to the numbers sold. etc.

Edited January 22, 201511 yr by andy

Such a shame if Gas Gas collapses. I just can't imagine how/why any new manufacturers would be joining the market in this climate. I really hope Vertigo can be successful, but even if theirs was the best bike on the market by far, there's surely still not enough riders around to give them a certain future. They must have something up their sleeve...

If the current enviroment small could mean survival. Make sure your products are good, and sell at a premium, low amounts. When economy goes back up again, you can invest and grow with the market.

But trial bikes are just not good volume products I think...

Maybe they've spent too much money on R+D?

Their many model (sorry I mean colour) changes over the years and new rim sticker designs/anodising must cost a fortune :-)

Clickety linky Official Statement from Gas Gas

Let's hope it's not too late so they can profit from the action the European Bank is planning to take.

http://www.bbc.com/news/business-30915210

Come on Dabster, you're a serious GasGas lover, why don't you start a crowdfunding for them!?

With a contract till 2017 if the worst should happen I'm assuming raga would get paid in full?

The real world doesn't work that way. If the worst comes to the worst with any business there's only one person that gets paid, the rest have to split what's left.

Here is a report.

http://larstrialinfo.nl/?p=581

Gas Gas make fntastic enduro bikes that are selling very well along with the Beta Enduro weapons. KTM sales have be very dented by them.

Manufacturing smaller numbers does not necessarily mean you can't survive as a company.

The world is full of small businesses who do just fine.