Ducati Co. Looking for Buyer

let's all chip in, I got $10.

 

I would too, and it makes a lot of sense on several levels.

 

How old is this news ?

 

interesting.

 

Curious your thoughts on that.

I see the better fit as Harley-Davidson, a company that myopically sold off MV Agusta and killed of Buell. This is a company that SORELY needs to cultivate a younger set, as well as expand the product line, and can't do that with the current heavyweight cruiser portfolio. HD can't manufacture a sport bike either, as the brand loyalists will reject it.

Ducati is a known name, has global presence, and appeals to the sporty set. HD is the company that should make the move. Sadly, I don't think they'll do it.

 

I hope to god that you are right. The absolute worst thing that could ever happen to Ducati is to be controlled by Harley. I know some of the management there, and it would be a major disaster for Ducati.

An example would be that a major portion of their parts would end up being made in China. When I last toured the Ducati factory (2008) all of their machinery was German, not Japanese, not American, not Chinese, but German. Absolutely the very best quality in their manufacturing. Interestingly, I toured the Ferrari factory right afterwards, and some of their machinery was Japanese (mostly German though).

The quality would go down, and you'd have a bunch of MBAs running the business, and you'd see a huge decline in the band. Ask Erik Buell about the management of Harley, ask him about his thoughts on their character, honesty, and business ethics.

Done with my rant.

Art

 

agree 100%. HD buying Ducati would be the end of Ducati, at least as we know it.

the Ferrari thing makes sense. both are Italian, both are legendary brands, both are racing/performance oriented. they are reasonably geographically close. there's lots of marketing/branding synergy, if not technical synergy.

not to mention huge crossover in their customer base...I know a lot of Ferrari owners have a Duc in the garage as well.

 

i suspect any move to hd would ensure the values would soon rise on my 888 and 916.

 

I've been eyeing an 848 EVO for a while....

 

Kieth Wandell (CEO of H-D) and the board at Harley are on borrowed time, and sacrificed the future buyers to protect H-D as a brand in the short term. Young people do not buy Harleys, and for a sportbike enthusiast they make absolutely nothing of interest. Nothing at all. The XR1200 is a joke as a sportbike. Harley/Buell finally had a decent sportbike in the 1125r, and it had real success in racing and Buell was actually turning a profit for the first time.

But the bean counters prevailed and the entire Buell operation was liquidated at a cost of around $125M. They should have just rebadged them as Harleys. A 1125r with a VR1000 orange/black paint scheme would have sold IMO.

And MV? A complete debacle of incompetent management in Milwaukee. Again, they develop the next generation of bikes (the 2010 F4) only to give the company away to the Castiglioni family again. Again, the cost to H-D was reportedly around $100M. Harley basically went from a crusier company with two sportbike names, to just a crusier company.

I agree, Harley buying Ducati would be terrible for Ducati. I'm also not convinced Fiat buying Ducati would be a great idea either, but it the better alternative.

From what I've read they might be purchased by a Chinese (like Benelli), or Indian (like KTM) manufacturer. I'm not sure either of those are fantastic options, but we shall see.

 

I think you meant "I hope to God you aren't right"...and I don't disagree with you on how it might be managed if HD owned it. I owned 5 Harleys previously, and I know the company well.

My point is that from Harley's strategy, it makes sense. I'm not focused on how it will be run - that's a different story and I agree that Harley would probably butcher it unless it was left alone as a wholly-owned subsidiary.

 

Forget tactics...I'm talking strategy. HD - with it's limited portfolio - will never grow without a broader offering. In fact, I'll argue they will become even more niche if they don't act fast. Ducati as a subsidiary is the only thing that makes sense.

 

Harley does one thing very well, and better than anyone else: the heavy large-displacement crusier. They are able to market these and sell a ton of accessories/apparel to their current and aspirational customers. If you read their quarterly statements from the dark days of 2009-10 their high-margin apparel and accessories were the only things making money. Harley was losing money overall or ekeing out a meager overall profit.

They have also shown to be incapable of doing anything else other than the large crusier. Again, Buell was kept afloat for 15 years and when they finally, possibly, had turned the corner, they killed it.

MV has a name at least as storied as Ducati, if not as well-known today. After the purchase I asked a couple of H-D dealers when they would have MV Agustas in the dealerships and got the same answer: Harley bought MV more for its dealer network in Europe than anything else (which makes absolutely zero sense because MV remains a small manufacturer). No wonder they couldn't sell any in the US, they were still in just a handful of previous MV dealers!

In my observation the Harley-only dealerships like it this way. Most (not all) treated Buells as the red-haired stepchildren of their showroom. They would much rather have sold you Heritage Softail than a Ulysses. It is easy to predict that it would be the same with Ducati. The Diavel would be shoved into the corner and the Multistrada hidden behind a Harley T-shirt display.

So while I agree that a Harley/Ducati company would be a formidable marketing machine if properly integrated, I have absolutely no faith that H-D could actually accomplish this.

 

That's fair, I don't disagree. However, if I were running the show and acquired Ducati, no HD dealer would see a Ducati and vice-versa.

HD actually did do Holiday Rambler well. That was back in the day that management was sharp and knew what they were doing. The Wandell era, for me, signals the end of the great run the company had post-AMF, starting with Vaughn Beals.

In addition to being a multi-time owner, I'm a shareholder of HD and have been for close to 20 years. Toured the factory many times, and very passionate about the company. Unfortunately, recent history has killed a lot of that passion.

 

Ducati's best years were when it was owned by Texas Pacific Group of USA.

The Castiglioni family (Cagiva) owned Ducati for decades, and into the 80's and 90's, the Ducati company was severely depressed, and put out a few slow, ugly models which further pushed them into the back of motorcycle brand chain.

IIRC, TPG bought the company (or shares which they were public at the time) from the Castiglioni family in the mid 90's, and did an incredible job of restructuring.

TPG was the company responsible for turning Ducati into a Brand and racing behemoth, coming up with new cutting edge models, and putting Ducati #1 sportbike brand in the world.

The company has lagged in the last 5 years, they still have some catchy bikes, but their brand push and phenomenon has softened compared to the TPG days.

 

I'm wearing my reading glasses and what I'm seeing is contradictory; HD fumbled MV Agusta, killed Buell and you say that they should buy Ducati? Yeah, only to shut it down 'cause, in their eyes, it's a way to squash the competition and "buy the buyers".

FYI, our local HD dealer (Rossmeyer) carried Ducati and Triumph. The showroom and shop was phenomenal but the affair lasted, what, three years?

Besides... this has been talked about for many years:

http://thekneeslider.com/archives/2007/06/14/ducati-considering-harley-davidson-merger/

 

I totally disagree... What happen to the Ducati F1... 951 and the 916 ??? Thanks to Cagiva we still have Ducatis around.
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TPG was not a bad thing for Ducati, it was basically broke and out of cash in '96 when the Castiglioni brothers were more or less forced to relinquish control to the investment firm. At the time bikes were sitting unfinished in the factory because vendors had cut off parts supply due to nonpayment.

So in that respect TPG was a good thing for Ducati because it kept them afloat. However,for several years TPG also milked the company without much innovation. The ST series were the only new bikes at the time. The SS line received a facelift and the MH900e was made available in 2000. There were endless varieties of Monster derivatives also made that really helped the company's profitability and sales numbers more so than the Superbikes.

 

Art, I hate to squash a small portion of your image of Ducati, but they are already engaging in global sourcing. Our company's global supply chain director has toured the facility in China that casts their single sided swingarms, for example. That is a world-class facility BTW. Still, keeping the majority of the machining in Italy is a smart move as that is where the precision is imbedded in the finished parts.

Back on topic, I've been away from the brand for a little while (see my profile for a better understanding of my Italian bike devotion) but I hope they can find another benevolent private equity buyer for the company.

-Greg

 

lol...yes the bikes ducati was producing prior to tpg's acquisition were "ugly models" as you indicate. the poor m900, 900ss, 888 and 916...faces only a mother could love. lol...brush up on your history buddy boy. still to this day the aforementioned remain some of the sexiest two wheelers of all time.

oh and lack of racing pedigree? i would suspect jimmy (rip), raymond, doug, carl and troy would beg to differ. again the history lessons still apply.

pcb

 

btw, may have taken starboys comments a bit too personally as i own an 888 and 916...should have provided that disclaimer in my previous post.

pcb

 

I didn't realize that you had a 888. That is such a cool bike. Side story. A friend had a 888SPO and a RC 30. He took both down to Bike Week in Daytona. His son ran the RC into the SPO on a main road. RC was fixed into the Smokin Joes paint scheme after that. He said he's considering selling the RC now. The SPO got fixed & sold. I need one for the living room! I had a early 900ss (white frame/black wheels), shoulda kept it.