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Ducarley Davidson?

Discussion in 'Site Announcements' started by vic, Jun 14, 2007.

  1. Code:
    Ducati to Merge with Harley Davidson?
    Thursday June 14, 2007 at 11:57:55 AM by Netrider | Send To Friend
    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 no"w 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’Onofrio said: "If you ask me, the best scenario is Harley."
    Ducati has longstanding relationships with both Unicredit and Mediobanca, but D’Onofrio said Mediobanca knows the company best. Ducati is not seeking advisors in the US, but has worked with Merrill Lynch and Morgan Stanley in the past for private placements.
    The US and Italy each generate about 25% of Ducati sales, while Germany, UK, France, Japan and the rest of the world bring in 10% each, D’Onofrio said. Investindustrial, BS Investimenti and HOPP together own about 30% of Ducati.
    Ducati trades at approximately 10x EBITDA and has a market capitalization of EUR 476m (USD 640m).
    Quick, lets pool some money together and open two Spud Cafe's, one in Lygon street and the other on Toorak Road :rofl:

  2. :LOL:
  3. why don't they use then in the bikes then :?:
  4. Don't be so quick to mock mate, we both know that Ducati can't make a decent set of chaps or a stylish bandanna, so who cares about the bike?, you can't wear that to the pub can you?, and anyway, nobody can see the nice contrasting stitching if you ride all scrunched up like those Ducati poofta's
  5. Does this mean that Buell's may actually get better?
  6. Yep great, so soon i'll be going down to my local HD dealer and whilst at the counter getting some HD motor oil next to me will be one of
    asking why his double decaf half-caf lat'e cino on the rocks with a twist of lemon is taking so long :shock:
  7. hmmm, is inci trying to tell us something?? :shock:
  8. :LOL: @ Joel.

    hmmm so do we get a shot of bourban with our lattes now?
  9. DuHast & Inci, you guys might have to start drinking Irish coffee's soon.

    It makes sense that Ducati & HD merge, I mean they have a similar market after all.... both brands are purchased by Cashed up bogans. :LOL: ....

    (Smithy is now in witness protection)
  10. Won't do ya no good mate, Duhast knows a few heavy clubbies, and I know some 'connected' eyetalians......and were coming for ya...maybe not today, maybe not tomorrow, but were coming. :twisted:
  11. and drives a GTS Monaro ---> ultimate bogan car ;)
  12. They will put Harley motor on the Ducati. It would also fix up the noisy clutch issue.
  13. Put a HD motor in a Ducati ??... hang on, isn't that the point of a Buell??

    But who's going to fix the reliability factor?? & what about the rediculous servcing costs..?? I guess it will be the same, regardless. :LOL:
  14. I knew there was some truth to the comment "European Harleys"
  15. Yup, it's official. Here is a spy shot of the first new Ducarley, much improved I must admit...

  16. where's the 1098 Fatboy??
  17. ha ha ha LOL - ROFLMAO - That rumour was funnier than any blonde jokes i've ever heard !
    That would definatley be a declaration of WWIII - you'd hear the engines of the Enola Gay within minutes ha ha ha ha ha
    The chances of that happening is zero & zip. Will not, could not and never will happen. Consider if it did, I'd give the harley factory approx 60 minutes after the deal was done before the plunder would take place.

    From the article - "Nationalism: Harley's brand is also dependent on its American identity; to lose this would diminish the value of the company considerably. The pejorative term 'Jap crap' is still commonly heard among Harley riders."

  18. Who are obviously totally ignorant of the fact HDs were built in Shinagawa, Japan from 1929 through to the start of WWII :roll:. These pre-war Harley designs formed the basis for the post-war Rikuo company, which was the start of the Japanese motorcycle industry.
  19. ^^^interesting :eek: