Competing Passions

COMPETING PASSIONS

THE BIKE BIZ ISN'T AS simple as we’d like it to be. We’d like brilliant designs to be manufactured to the highest standards by a dedicated workforce, then set loose upon an appreciative public that snaps them up as fast as they are produced. The driving forces are passion for motorcycling, passion for excellence.

There are competing passions. The public can’t always afford to buy. Investment bankers want their money. Exciting new models require new capital. Someone has to pay the janitors.

Lately, Ducati has tried to freshen its model line with remakes, cheaper to produce than all-new models.

The increasing value of the euro builds a wall between European products and U.S. buyers. Some models-the Multistrada among them-have fallen short of sales predictions. The company needs new capital for new models, as the core of its income remains the Monster-a 12-year-old design. Texas Pacific Group, the investors who own Ducati, makes its money by buying under-performing firms, reorganizing them to realize their potential, then re-selling once the share price permits a satisfactory profit. Putting in lots more money is not part of this game. Further, a recent press release stated Ducati Motor Holding has sold to Ducati Corse the “Ducati

Corse brand.” The I stated purpose was I “to rationalize management of the ‘Ducati’ and ‘Ducati Corse’ brands, allowing each brand to be developed economically as separate entities.” Deeper motivations for this internal sale were not made clear.

Now come twin rumors that Ducati may be offered to buyers with ready cash. One rumor mentions fellow Italian bike-maker Piaggio. The other names the Malaysian automaker Proton, which already owns such western properties as Lotus and MV Agusta.

A query to Fabrizio Nardi at Ducati investor relations drew this response:

“Piaggio is involved in the Aprilia acquisition and.. .has a lot to do for at least a couple of years. Proton bought the majority share of MV Agusta/Cagiva Group and also for them there is a lot to do.”

He dismissed speculation that Ducati might be subject to public offer, remarking, “Share price indicates that the market is not really thinking the same.”

It will be interesting to see how Ducati handles the aspects of this situation-sales issues and internal “brand” trading, for example—not dealt with in Nardi’s remarks.

Kevin Cameron