India's Hero considers acquisition of Ducati

Yeah and VW is real good at partnerships…. They are in arbitration with Suzuki who ended the partnership in September of 2011.

If VW buys Ducati they have to pony up a billion dollars, then what is the plan? The plan that would make Ducati profitable enough to recover the billion and also pay off the Ducati debts. That is the realty of it currently the Ducati operations are covering its heavy dept payments and would need to keep doing that and also present also an opportunity to recover the billion invested.

I really cannot see it happening, sure they can expand sales into emerging markets with very high priced imported offerings but that’s a limited segment and they are already doing that, so its nothing new and in that presents no new revenue.

The high priced imports are growing in emerging markets, but inevitably will be cut by internal domestically made offerings.

Hero could pony up the billion and also set up operations internally that could generate huge revenue streams within India and subsequently pay off the dept and return the operations at Ducati to profitability.

The emerging market have the capital and that capital needs to be returned to developing markets, it needs to be used to reset the developed side. But it has to be done intelligently and not to destroy the developed markets that emerging market depend on in the capital cycling global economy.

Resetting is not uncommon, but has to come with lessons and austerity measures or the idiots that got them into the predicament will remain fat and complacent.

The US government just reset the auto industry in the USA and in that they partnered with the Italians in one venture. Nothing was destroyed in that it merely all was reset and the capital is now being recovered though better operations and positive cash flows.

The Germans resetting Italians is unwise it hurts them both, the developing nations need to be the source of the revenue and in exchange for technology.

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Originally Posted by MJH

The US government just reset the auto industry in the USA and in that they partnered with the Italians in one venture. Nothing was destroyed in that it merely all was reset and the capital is now being recovered though better operations and positive cash flows.

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Originally Posted by MJH

The Germans resetting Italians is unwise it hurts them both, the developing nations need to be the source of the revenue and in exchange for technology.

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Are you now suggesting that Italy is a developing nation :icon10:?

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Originally Posted by 998S

Are you now suggesting that Italy is a developing nation :icon10:?

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No I used that only as an example of meeting needs for capitalization, without creating losers. Fiat brought needed technology in that of small displacement engines. The actual capital was initially sourced from the US treasury and that in part is backed in china holding treasury bonds.

Shouldn't; these motorcycles be sitting in showrooms throughout Asia with the Ducati name on them?
http://i784.photobucket.com/albums/y.../Lifan250V.jpg
http://www.mychinamoto.com/forums/at...354808&thumb=1http://www.webbikeworld.com/ducati-m...ypermotard.jpg
I like things to match, I really would be tickled to see a mini Hypermotard and mini Monster, I really wonder if the L engine layout could be shrunk down into a 250cc? Made in India it would all be or could be affordable/feasible. I would think that it could or would be comparable to the Honda VTR twin that offers 30hp @10,500 rpm.

That makes sense to me, to offer that to the India market as a Ducati and gets back at Honda for making a copy of the monster in the first place.

The issue would be that of efficiency, the 250 would have to be lean and mean and meet all global standards.

Of all my rambling posts and linked images, it is the VTR250 that rates the highest its images get the highest hit counts and from all over the globe.

http://www.indiapricebuzz.in/bikes/w...da-VTR2501.jpg
http://4.bp.blogspot.com/_5_ewoocjMX...onster_696.jpg

What the Hell is a Hero...

Thanks for that Visordown link, MJH. Interesting enough that I'm cutting and pasting it in here.

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What the hell is Hero?

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It wants to buy Ducati, but where has Hero come from?


Tweet Posted: 9 March 2012
by Visordown News


UNLESS you've spent time in India, as a motorcycle brand Hero probably doesn't mean much to you. But now it wants to buy Ducati and everyone's ears have pricked up. Is this a safe set of hands? Does it really have the money? What, in short, is Hero all about?


Until a year or so ago, Hero was a joint venture with Honda, effectively acting as the firm's arm in India as Hero Honda, with its own range of bikes, production facilties and everything else. But during 2010, with Honda keen to take full control of its own Indian operation, the firms split, leaving Hero as a stand-alone brand.


Here in the west, we tend to see Honda as being all-powerful when it comes to bikes, but the reality is that in terms of pure numbers of bikes made, Hero is actually bigger. And its rate of growth has been beyond belief.


Created in 1983, it's first bike didn't appear until 1985. Starting small – around the size of Triumph today – the firm took until 1987 to make its first 100,000 machines. By '91 it had made 500,000. It passed the million mark in terms of total production in '94. Still pretty low-key stuff, really.


But since then its growth has gone off the chart. It took a decade to make its first million bikes, but only four years for its second million, passing the mark in '98. Two years later, in 2000, it had doubled again, with total production passing the four million mark. A year later, in 2001, it became the world's biggest bike maker in terms of volume. Sales passed seven million in 2003, and by 2004 it was making more than two million per year, passing the 10 million total in the process. It now makes more than five million bikes every 12 months, its total production since the firm's inception somewhere north of the 40 million mark.


More than that, its earnings just seem to keep rising. The firm's most recent annual report puts its sales up 12.5%, income up 17.3%, profits up 14.7%... All this while the most of the world's bike industry is trying to keep its head above water. Can it afford Ducati? Yes.


OK, so presuming you've been brought up on a diet of western or Japanese bikes, you're probably not going to be too excited about any of Hero's products. We're talking small, air-cooled, single-cylinder machines, mostly with drum brakes and primitive styling compared to the sophisticated machines we're used to. But when you look at how fast Hero has moved in terms of ramping up production, it becomes easy to see that in a few years it could easily be challenging the established brands in terms of technology, too.


While it still has some technical co-operation with Honda, Hero's recent moves have been all about building a base of technical knowledge to draw upon. In the last couple of weeks, as well as throwing its hat into the ring when it comes to wanting to buy Ducati, the firm has hooked up with Erik Buell, sponsoring his firm's race efforts and getting technical and design help in return. Ducati, with its expertise in chassis, engine and electronics, would be a way to get instant access to the latest technology once Honda has gone its separate way.


Would Indian ownership harm Ducati. Some would be sure to baulk at the link between Hero's budget bikes and Ducati's thoroughbreds, but fellow Indian firm Tata – owner of Jaguar and Land Rover since 2008 – has shown that with a light touch and plenty of investment it's been more than able to do justice to the heritage and appeal of the cars made under those brands, seeing a big growth in sales and profits as a result.






Read more: http://www.visordown.com/motorcycle-...#ixzz1osyV6him

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CAR 12/march:

Audi has struck an exclusive deal giving it first rights to buy Italian superbike manufacturer Ducati, CAR can reveal.

The exclusivity deal gives Audi until mid April when the deal will likely be finalised, according to high-ranking sources contact by CAR.
Ducati's liabilities are around €200 million [earlier report said €800 million, this has been corrected], and our sources suggest the total purchase price is about €250m-€300m.
This is a bold move by Audi, which sees the long-term advantage in moving into two wheels as well as four.
Why is Audi buying Ducati?

It's all part of Project Eagle, another brainchild of Volkswagen group scion Ferdinand Piech. He has been eyeing up the opportunity of buying a prestigious motorcycle brand for some time, and considered reviving Horex, a German motorbike firm which made single- and twin-cylinder bikes from 1936 to 1956.
But Horex doesn't have enough brand recognition, so when Bologna-based Ducati came up for sale the VW Group paid close attention. Especially since Mercedes-Benz recently entered into a cross-promotional deal with Ducati.
Ducati, which makes around 40,000 motorcycles a year, is on the market since its debt burden is reportedly higher than its revenues.
Who else might buy Ducati?

India's Mahindra and Hero, Daimler and Volkswagen are said to be among the leading suitors, but CAR can reveal that Audi has struck an exclusivity deal giving it first dibs on Ducati.
A small team of advisors has been formed in Ingolstadt under the Project Eagle name and they're currently doing due diligence on the Ducati deal. According to our insiders, there is no way Audi will pay telephone numbers for Ducati. Instead, the Germans will probably put no more than €50m to €100m on the table - but absorb the new partner's substantial liabilities.
Ducati chairman Andrea Bonomi has in the past pointed out that he views 'Ducati as the two-wheel equivalent of Audi', a perception Ferdinand Piech would likely agree with. In 2008, Piech said it was a mistake not to have bought Ducati when the company was on the brink of brankruptcy before. Four years later, Volkswagen is now closer then ever to making the chairman's vision complete.
But first of all, the Audi delegation must take a deep dive into the Ducati R&D department and check out the Borgo Panigale production facility. After all, it takes more than a strong name to make Project Eagle fly.

Like MJH, my hero in this battle is Hero.

cheers!

G'Day,

All the Ducati boards are abuzz with rumours, news, etc........

Audi to Buy Ducati?

MON, MARCH 12TH, 2012

It has been almost a year now since we broke the news that Ducati Motor Holding was up for sale, and I still can’t tell if the appropriate metaphor for the ongoing acquisition is a game of musical chairs or Russian roulette. Vying for a seat or putting the chamber to its temple, our latest contestant in “Who Wants to Buy Ducati” is Audi, the four-ringed German car manufacturer. Reported to have a right of first refusal, Audi allegedly has until mid-April to finalize a deal with Investindustrial (Ducati’s main investor) to buy Ducati from the Italian investment group.


Though Ducati sold over 40,000 motorcycles in 2011, the Italian company has roughly €800 million in debt on its books. This means that any company interested in buying Ducati would have to assume the Italian company’s debt onto its own books, which changes the actual purchase price of Ducati dramatically. For its part, Audi is rumored to be making an offer in the €850 million range, which would put the actual purchase value of Ducati at over €50 million, and could put as much as €100 million on the table for Investindustrial to take.


For a bit of history, Ducati’s first suitor was AMG (read: Mercedes-Benz), and while Ducati was keen to sell to the german sport car manufacturer, the Stuttgart natives were reportedly less enthusiastic about the idea. Though AMG and Ducati didn’t enter into a shotgun wedding, the two parties did have a quick torrid affair that resulted in the two companies sharing their marketing efforts, which included the creation of the Ducati Diavel AMG. With the romance reportedly ending late last year, Ducati continued to flirt across the bar with several other brands, and even sent some very ouvert signals with the mention of a private offering and the rumor of a public listing on the Hong Kong stock index.


Since that time (and likely to some extent before it), investment bankers have been trying to line up potential buyers for the brand, with prices in the €800 million to €1 billion range being bandied about by the media, all with a sliding scale of accuracy that can only be found in motorcycle journalism. While companies like VW and BMW have long been linked to buying Ducati, the ah-ha moment in this whole process has been the idea of an Indian suitor.


This has lead to companies like Mahindra and Hero MotoCorp being brought into the rumor fold, which has almost certainly been a complete fabrication by the motorcycle media. The Mahindra component in these reports appears to be caused from pure speculation by some India-based news sources, while Hero’s involvement has been twisted around to make the India’s largest motorcycle-maker more involved than it actually is. With investment bankers approaching Hero, not the other way around, the Indian company confirmed that it had looked into buying Ducati, as it does with all credible offers that are brought to it its table — nothing more, nothing less.


This chain of events brings us to the present, where now reports are circling that Audi could be the new home of Ducati motorcycles. Though spreading over the internet like wildfire, the news comes from a solitary article onCar Magazine, which has been reprinted by several of the magazine’s other sister publications. According toCar, this news dovetails nicely with VW Chairman Ferdinand Piech’s desire to have a motorcycle brand in its wings.


Linked first to Horex, the idea of reviving the aged brand was deemed less appealing by Volkswagen than purchasing a turn-key operation. The purchase would also give VW something to rival BMW Motorrad, though perhaps most importantly, Ducati’s lower carbon emissions could help offset the large touring cars that Audi builds, as emissions standards in Europe continue to get more stringent. Should Zie Germans like what they see as they go through Ducati’s books and operations, it would prove to be a pivotal point in time for the Italian brand. A company like Audi would have the kind of resources Ducati would need to mount a larger global operation, which would help take Ducati to its next mile-marker on its goal sheet.

Source: http://www.asphaltandrubber.com/news...ti/#more-28784

Interesting how one journalist can glean the truth from all the others rumors?

If a company is heavy in debt that is a very big concern, and since Ducati is held by a private equity company it does not offer detailed financials publicly.

How did Ducati mount that debt, what are the unit margins, what are the operating ratios. What again can VW do for Ducati, they assisted in the development of a six cylinder for Horex a bike that is hand made and sells for over 21,000 Euros. Is that what can be expected from a VW empowered Ducati?

Ducati has to be turned around or so it seems, spending more or investing in new designs to be sold to who and were? What is the biggest seller in the line isn’t it the Monster, it is not the AMG model is it? Not all the ultra rich buy motorcycles, it is a limited market. Not to say it should not be covered but it really should coexist with a wider offering and in that increased access through greater affordability.

It is not to say that VW cannot get Ducati there, but its not going to come cheap they have to offer more to more. They basically have to increase the unit sales and also improve the margins on all models offered.

I see Hero/Ducati as a Qianjiang/Benelli but just way better.

Ducati is it not high end enough? Is there something missing in the Ducati line beyond the top model? Is the existing line not refined enough? It is always a mater of investing to improve offerings and if higher then the sales in units fall proportionally, then it’s a matter of efficiency and cost control mass producings and high end do not go well together, that is because there is no masses to supply to.

I would say that the Ducati sales could be increased by 25% in the time it would take them to get a 250 version into the Indian market. However that engine development would be key and also with a shared 125cc head that could be configured horizontally or vertically on other offerings, a 125 would need to offer at least 15 hp. That is what Hero needs it needs the single that would stem off an L twin 250.

So the call would be for a small engine development team to be set up and operate in Italy and also in India. That would be eventually linked into existing operations of Hero.