From:http://www.ft.com/cms/s/209fe0b8-18a...b5df10621.html

Ducati Motor Holding, the listed Italian motorcycle manufacturer, would consider a merger with US-based Harley-Davidson “anytime”, said Enrico D’Onofrio, CFO.
A merger with Harley-Davidson would be “totally complementary”, he said, responding to speculation in the market that the two firms had been in talks. And while he declined to comment on the speculation, he did say that the two companies are similar in that they create recreational bikes that consumers fantasize about. “People want to buy a dream.” Harley-Davidson has an older consumer profile, with an average age of 55, while Ducati owners are about 35, on average. Half of all Ducati owners in the US also own a Harley, D’Onofrio added.

A potential combination with the US company could also help Ducati with procurement, as Harley is a larger company that is able to get better quality products at lower prices. A marriage would also increase distribution opportunities for Ducati, which is a relatively small manufacturer. “In the US, we do not have critical mass,” D’Onofrio said. “In this market, you must.”

D’Onofrio said Harley could also stand to benefit, as it could be interested in expanding internationally. “The US market is flattening,” D’Onofrio said.
Asked if Harley-Davidson has ever visited Ducati’s factory in Bologna, the executive said: “Yes, we are good friends.” He said Harley visited as recently as two months ago.

Still, D’Onofrio acknowledged that some at the top of the company believe a combination with another company could dilute the Ducati brand, which dates back to the 1920s. But D’Onofrio said it is his opinion that the company could maintain its strong brand identity, even in the case of a strategic buyout.
Ducati faced difficult times in 2005 and 2006, but now has a new shareholder and is focused on reducing fixed costs and increasing margins. The company has decided to limit the number of its entry bikes, and focus on its higher-end and higher-margin motorcycles, D’Onofrio said.

Texas Pacific Group sold its 30% minus one share stake in Ducati in March 2006, after holding it from 1996, to Investindustrial, an Italian private equity firm. The company has also changed its R&D structure, focusing more on racing, and has brought in a former Toyota executive to oversee quality, D’Onofrio said.
The executive estimates that Ducati will be ready to consider a “marriage” in about one- to- three years, or once it meets its goals promised to shareholders. D’Onofrio said Ducati aims to reach EBITDA of greater than 14% and to sell 50,000 bikes per year by the end of 2008. The company is currently at about 15% EBITDA, and sold 32,000 bikes in 2006.

Also as a result of its restructuring, Ducati has reduced its debt to about 30%, and could therefore also consider acquisitions, D’Onofrio said. Ducati once considered a purchase of Moto Guzzi, which has since been acquired by Piaggio. Husqvarna could also be a potential fit, but is likely to be acquired by BMW, and is therefore not really on the market, D’Onofrio said.

He also downplayed the likelihood of another private equity buyout, explaining that after the involvement of TPG and Investindustrial, Ducati now needs to focus on its strategic outlook. “I truly think we need to find an industrial alliance,” he said.

“It’s clear the market is consolidating. The Japanese own more than 80% of the market,” D’Onofrio noted. He cited speculation regarding a Piaggio and Harley-Davidson tie-up, as well as a Piaggio and Ducati combination, which he said could both be logical scenarios. But for Ducati, D’O

 

Have to say,Ducati has always made a motorcycle for the true enthusiast.

 

I think this would be a great move on both their parts. Two companies with a lot of "soul" appeal. The Ducati 996 (1098, these days) is the only sportbike that makes me drool. Triumph is another marque I really like, but they have nothing on the Ducs. And there's much to gain, as H-D would get access to Ducati's water-cooled twin technology and design, while Ducati would gain the credibility H-D's long history and rich heritage provide. Honestly, I hope this happens, so long as they keep the cruiser and sportbike businesses completely and totally separate. NO badge engineering! This would make buying a Ducati 1098S or Hypermotard a much simpler decision.

 

I wonder what would happen to Buell?

 

I believe they would take on a more Italian feel, hopefully remaining Harley dominant though..

This could be a GREAT thing...

 

Could you imagine Eric Buell if he got to play with Ducati engines and chasis? Wow. My guess would be that Buell would end up going more "Dual Purpose". Ulyseus (sp) would have been the first step in that direction. Someone was also mentioning a dirt bike of some sort. So let's see, Harleys for cruisers/tourers, Ducatis for sport/racing, Buells for off-road/dual purpose. Would seem to be a fit.

 

Not sure what to think about this. I love Ducati and just bought a Monster. great bikes. Will HD be content in just funding Ducati, or will they want to get involved in design and manufacturing? I agree they need to keep the two separate if it does go thru. Will be intersting to see how this plays out...

ride safe


'00 FXST - daily ride
'02 Buell blast - kids bike - 14 & 16 yr olds learning to ride
'07 Ducati Monster - for the twisties

 

I like the idea because it would be a great help in the emissions/water cooled path. I think it would be a much better fit than Porsche(?) for the future.

 

I think this would make a lot of sense. I've owned both and bought my Duc after having owned three Harley's back in '92. When I went to insure it, I wondered why it cost me so little and my State Farm agent told me "because Ducati buyers are a lot like you...older guys who've owned 3-5 other bikes, have a lot of experience and don't have accidents...like BMW riders." They're high-end rides, twin-cylinder, and Ducati knows a metric buttload about air and oil-cooling, something that could serve H-D very well ( I couldn't get my 900 SS to operating temp in the driveway no matter how long it sat there, and it never got hot when riding, even in the city).

Ducati would bring a certain panache to the line for those that think H-D lacks sophistication (which, in reality, it does) and a dual-line showroom presence, both here and in Europe could benefit both brands because people who might otherwise never cross-shop or venture into the other guys' showroom might see an interesting "second bike". Ducati makes some interesting machines other that pure sporters now (The Multistrada, while looking like an insect, is one of the most comfortable bikes I've ever sat astride and it has the heart of a sportbike engine).

I wouldn't dismiss this idea out of hand, if I was on the board in Milwaukee....

 

From a stockholder's perspective, which I am not, at first glance, I would like the idea.

Two great brand names with no real overlap in the marketplace.

Harley gets Ducati engineering and Ducati get's Harley's marketing machine.