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#20 Re: India's Hero considers acquisition of Ducati
03-16-2012, 03:43 AM
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.
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