Vmoto to buy out CSR

15 April, 2008:

Hoping to be a major player in Europe, Aussie scooter maker Vmoto is set to buy out Spanish firm CSR.

Industry reports said that the multi-million-dollar sale would be finalized at the end of April 2008. Vmoto, the Perth-based Aussie major, is an Australian Securities Exchange listed company that makes scooters and all-terrain vehicles, in China.

It is expected that the CSR brand would cease to exist soon after the acquisition, and all their vehicles would be branded Vmoto around the world. The proposed CSR acquisition is subject to final due diligence and documentation.

CSR is a maker of scooters as well as Scartt, a new category of off-road recreational products, and the NKT naked cafe racing style motorcycle. Post buyout, the Scartt and NKT models would come to Australia and are likely to bear the Vmoto brand name.

Vmoto, which boasts of an annual turnover of about $35 million is very optimistic about the take over of CSR which has an annual turn over of about 12 million. Vmoto had posed the third-highest scooter sales in Australia in 2007 with 1439, down 25.2 per cent on 2006, behind Bolwell and Yamaha that sold 2446 and 1758, respectively.

Statistics say that the European market for scooters is the largest and most mature, representing about six million sales in 2007 worth about $11.2 billion and growing at an average rate of 9.7 per cent a year.

It remains to be seen what effect the acquisition of the European CSR by Australian Vmoto would have in the European market.