Ducati. First half 2019 global sales down again

Ducati ended the first half 2019 without victories the market-field. Indeed global sales kept moderately slip down due to the almost negative performance in the countries on which more has been invested in recent years. Only the positive trend of the European region sustained the performance, but second half outlook is more negative.

 

Global Sales 

The first half 2019 Global Ducati sales has not been as expected, reporting a marginal lost of 0.6% with 30.384 registrations.

Indeed, in recent years sales has been flat, following the fast growth in the 2015 (first year over 50.000 units in a calendar years) and the 2016 (with the actual all time record sales at 54.257 sales) and after the not positive trend in the 2017 and 2018, the current year is projected to be again moderately negative, while all others premium brands – excluding Harley Davidson – have in place multi-year record row.

We were expecting a more positive year considering that the main Ducati region – Europe representing 58% of total sales – is growing. In case of Ducati, while EU28 region is positive – by a mere 0.7% with 19.714 units – East Europe (Russia, Turkey, Ukraine and others) is down a sharp 29%.

In the “traditional markets”, Ducati is – in general – stable: in North America (US, Canada and Mexico) figures were up 0.7% and in Asian region (China, Japan, Korea & Taiwan) is up 1.5%. Anyhow, consider that in both region Ducati in recent years has lost near 20-25 percent from the record volume.

Which is really surprising is the trend in the “new markets”, ASEAN and Latin America, where Ducati invested in recent years building up local partnership to build a plant in Brazil and in Thailand. This year in ASEAN Ducati is losing again 8%, despite having ended the 2018 at the half of the regional record, established in the 2015 (with over 3.600 sales) and despite Vietnam is performing quite well. The issue is Thailand, where Ducati is selling only 20% of the 2015!

In Latin America sales are down 15.5%, losing in all countries a part Colombia. Again, the surprise is from the country where they established the production site. In fact this year Brazilian market is recovering, but Ducati is losing a further 22.9%, after the 36.1% lost last year.

Someone told us that Ducati issue was on the sales team attitude (and indeed a new fellow has been in charged of this uncomfortable chair since the end of 2018). However, data and analysis are raising more than one question with regard to this “easy” explanation.

Looking at the other premium brands in the World, BMW, KTM overall, but even at the Benelli and Husqvarna success, it seems that Ducati issue is above the sales attitude and involve other relevant areas, like Strategic Marketing and Product Strategy and actually it looks entrapped in a negative loop and the desire (and opportunity) to growth remains in the wishlist, rather than receiving effective visionary and daring actions. 

Recently, King Karl Fogarty presented a limited edition to celebrate the most beautiful motorbike of last century, the Ducati 916, a myth for two-cylinder desmo. Will this be enough to avoid the 2019 sales lost?

 

The Heritage

Ducati Motor Holding S.p.A. is the motorcycle-manufacturing division of Italian company Ducati, headquartered in Bologna, Italy. The company is owned by German automotive manufacturer Audi through its Italian subsidiary Lamborghini, which is in turn owned by the Volkswagen Group.

In 1926 Antonio Cavalieri Ducati and his three sons founded the “Società Scientifica Radio Brevetti Ducati” in Bologna to produce vacuum tubes, condensers and other radio components. In 1935 they had enough success to allow the construction of a new factory. Meanwhile, in the small Turin-based company SIATA (Italian company for technical Aviation applications), Aldo Farinelli has started developing a small thrust engine to be mounted on bicycles. This engine was called “Cucciolo” (referring to the characteristic sound of the exhaust).

In 1950, after the sale of over 200,000 Cucciolos, in collaboration with SIATA, the Ducati company finally offered its bike based on the Cucciolo. Ducati soon abandoned this name in favor of “55M” and “65TL”. When the market moved on larger motorcycles, the Ducati introduced a four-stroke scooter (65TS and Cruiser). It was not a great success, and only two thousand models were made in two years before the model stopped production. In 1953, the management divided the company into two separate entities, Ducati Meccanica SpA and Ducati Elettronica, in recognition of its divergent motorcycle and electronic product lines.

In the 1960s, Ducati produced the fastest 250cc motorcycle and in the ’70s began producing large-displacement V-Twin motorcycles.

In 1985 Cagiva bought the factory but kept the name “Ducati” on his motorcycles.

In 1996, Cagiva accepted the offer of the Texas Pacific group which first bought 51% and then the remaining 49% to become the sole owner of Ducati. In 1999 TPG issued an initial public offering of Ducati shares and renamed “Ducati Motor Holding SpA”. TPG has sold over 65% of its shares in Ducati, leaving TPG the majority shareholder. In December 2005, Ducati returned to Italian ownership with the sale of the investment in Texas Pacific (minus one share) to Investindustrial Holdings, the investment fund of Carlo and Andrea Bonomi.

In April 2012, the subsidiary Audi of Volkswagen Group announced that the subsidiary Automobili Lamborghini S.p.A. of AUDI AG acquired 100% of Ducati Motor Holding S.p.A. on July 19, 2012 for 747 million euros (909 million US dollars).

 

 

 

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