Red Paint, Black Ink
RED PAINT,BLACK INK
DUCATI IS A TYPICAL Italian motor company, like, Ferrari or Lamborghini. And like the two supercar specialists, its financial condition is traditionally very unstable, with glorious ups followed by downs of similar magnitude. Only this time the downs for Ducati lasted a bit too long and were a bit too deep.
Official announcements and private statements through the last few years never really confirmed how close Ducati had been to a dramatic financial collapse. Losses had been piling up at an increasing pace and compounded a number of other organizational troubles that snowballed into a rising flow of red ink. Last year marked the turning point anxiously pursued by Ducati’s top management. While CEO Federico Minoli was looking for a new partnership to take over Ducati from the Texas Pacific Group, General Manager Claudio Domenicali zeroed on the fundamental problems: Improve productivity by trimming an overgrown workforce and streamlining development; revamp the model line with salable styling and better quality; and readjust the focus of the product range toward more-profitable models. A prime example of the product difficulties was the enormous number of Super Sport units that both did not sell well and generated limited or no profit due to necessary dealer incentives.
Clearly, Domenicali’s work paid off. Worldwide dealers gathered at the Milan Show last November were thrilled by the launch of the 1098. Ducati closed 2006 by posting earnings of 27 million euros vs. the previous year’s loss of 300,000 euros. The U.S. market was where Ducati’s sales improved most in 2006, going up 16.3 percent. And the 1098 was not dialed in until the last few days of the year!
That bike, the Hypermotard and the Desmosedici (1100 already booked) are set to greatly enhance profitability in 2007. The Ducati contingent will have a lot to cheer and celebrate at the next World Ducati Weekend at the customary Misano racetrack June 28July 1. Bright red paint and a return to the core company values have produced major black ink.
—.Bruno dePrato
