The Financial Times' Heather West reported today that Bologna, Italy-based Ducati Motor Holdings (NYSE:DMH) would be receptive to a rumored merger with Harley-Davidson (NYSE:HOG).
I find this rumor intriguing. As I wrote recently, H-D has been unsuccessful to date with its Buell brand in establishing a presence in the sport (road racing) bike market, which skews demographically to a younger rider. While Ducati's world-wide sales are minuscule compared to the big four Japanese brands (Honda (NYSE:HMC), Yamaha (OTC:YAMHF), Kawasaki,(OTC:KWHIY), and Suzuki (OTC:SZKMF)) none can match their road racing success, history and reputation for technical excellence.
For example, Ducati has long dominated the World Superbike Championship, motorcycling's version of Formula One racing. Like Ferrari, they are known for technical innovation and cutting-edge performance.
The company's financial status has been unsettled for years. The Texas Pacific Group bought 100% of the company in 1996-98, but has since sold all its shares, mostly to Italian investors. While Ducati appears to have righted the boat in 2006, despite a decline in units sold, the company carries a debt load that will have to be factored into any takeover. It also faces negotiation of a new union contract this year, always a concern for Italian companies. They recently filed to delist from the NYSE, citing cost considerations.
If H-D can make the numbers work, I can see a number of pluses in such a deal. Certainly its dealer network would welcome such an appealing addition to its product line. It could also leverage its existing distribution network, and perhaps manufacturing, to reduce operating costs. Ducati primarily markets its brand through its racing program, which would give H-D exposure where it currently has none.
There is no sexier name in motorcycling than Ducati, and I wouldn't be surprised to see such a deal go into negotiation.











Reader Comments (Page 1 of 1)
6-13-2007 @ 2:10PM
michael said...
harley-davidson and ducati? a match made in heaven! get on the ball harley accountents and stock holders, crunch the numbers to where it works and make this deal happen!
6-13-2007 @ 7:40PM
Rick said...
Just because they may have a merger or anything like that doesnt mean you will see a blending of the brands. I think they would remain totally seperated (maybe some mixing in Europe or Asia). It would just be for Harley to have a piece of the sportbike and racing market that it lacks now. Sharing technology would be another benefit and it is not a new idea. Harley did with Porsche for the VRod. The only reason the Buell brand doesnt sell is because they are ugly and dated and have no racing heritage. Winning races, speed and performance is what counts for sportbikes. Buells racing against other Buells doesnt count. I do not deny Buells are great handling for the average Joe or for the weekend track guys, but to compete in a real World Superbike Competition things need to change. Another thing you can forget about is that Harley will mess with nostalgic, biker, rebel or Americana image thier brand is known for by mixing in some of that Italian engineering or putting them in the same showroom. I happen to own 3 Harleys and am actually considering a Ducati but a Buell isnt even a consideration. Just my taste.
6-14-2007 @ 1:52AM
earthling said...
No, Ducati, no!!! Stay away from those damn pigs, I mean hogs.
6-14-2007 @ 4:24PM
Todd said...
Your article mentions Ducati benefiting from HD's dealer network. It also mentions how Buell has been unsuccessful. One of the big reasons that Buell has been unsuccessful is the fact that they are treated like the bastard step-children at the HD dealerships. Most of the HD dealers don't even carry the Buell brand and those that do don't even put any effort into selling the brand. When I was looking at the Ulysses (a Buell model) this was quite obvious at the showrooms I visited.
If they brought Ducati's into the HD showrooms I think they will suffer the same fate as Buell. Nobody that works in an HD dealership will have a clue about Ducati's or how to sell them. I think Ducati would still have to be sold at independent dealerships.
6-14-2007 @ 5:58PM
supermotard said...
Ducati stock has stopped trading. What happens to current holders. This stock was trading on NYSE and just stopped.
6-15-2007 @ 11:33AM
jpdr1100 said...
World Superbike is not the two-wheeled equivalent of Formula 1. Moto-GP is that, and Ducati competes there as well.
6-21-2007 @ 12:00AM
Michael said...
HD dealers don't know how to treat sportbike people. A very different crowd from the typical HD customer. The typical HD customer wants style over substance, looks over performance (think monster truck over BMW car). Two very different ways to sell to customers.
Then you get to the service side, where the mechanics and equipment must be of a much higher standard (this is a 'chrome don't go' customer).
Duc's and HD's are about as good a mix as Aermacchi (now part of two different names: Cagiva and Aprilia) was in the 60's & 70's. They can fix the Buell issue a lot cheaper by giving them a competitive engine (which is rumored to be in the making) as opposed to the Sportster based limits they have now.
6-21-2007 @ 3:12PM
FBJ said...
I've owned many Motorcycles over the past 50 years and it seems that aquiring Ducati by HD would be a very good move by HD. The Ducati 1098 is a very good example of first line engineering and design. I think HD should think about a new direction for the company if the aquisition takes place, not competing with their line in the showroom. It needs to be a different (seperate from their floor display away from their regular line.
Ducati, a very fine designed bike, has had a multi number of reliability problems when it comes to frightfull maintenance costs for the rider.
Ducati advertises a 50% drop in maintenance in their 1098 model.
FJ
6-26-2007 @ 3:39PM
Merlingroup said...
Harley & Ducati... freakin' Bellissimo!
The world's best road machines coupled with the world's best sport bikes in a single dealership? When do I shift my 401(k) plan into 6th gear by overweighting HOG?
Just do this... the world will love it!
6-27-2007 @ 3:54PM
Alexander Ward said...
I think the combination would be super, but Michael and Todd have raised an excellent point regarding the capability of Harley dealers to handle sportbikes. My local dealer, Gary Bang, in Atascadero, California is an example of such. It is an excellent Harley dealership with good service (I have a '96 Sportster and two Ducatis, a Monster 900 and a ST4s), but I still feel uncomfortable there. My Sportster is a cafe model with clipons, rearsets, etc, and I ride with full sportbike kit, including track leathers and full-face helmet. No chrome on the bike either. As was mentioned in an earlier post, this departs from the Harley style and demographic. It will take some inspired management and marketing to accomodate the dissimilar cultures, but the synergistic benefits of a merger would be greatly beneficial to both companies. Besides, I need a local Ducati dealer! So merge NOW! No, yesterday!
Alex