Ducati

Background information

In 1926, engineer Antonio Cavalieri Ducati founded the Società Scientifica Radio Brevetti Ducati, which specialized in the research and production of technologies for radio communications. Its aim was to capitalize industrially on the patents of Ducati’s son Adriano, a pioneer in radio transmissions.

Despite his youth, the latter had instituted the first stable Italy-United States connection, as well as the first simultaneous connection between the five continents. Thanks to Antonio Ducati’s children (for the founder had passed away one year after the foundation), the company quickly began to establish itself, going on to encompass various industrial fields. After World War II, the necessity arose to add new production.

Thus, in 1946, and at the request of the IRI (Istituto per la Ricostruzione Industriale), the motorcycle division was born. Its original intent was to produce the Cucciolo (a single-cylinder, 48 cc, two-speed motor that could be attached to a normal bicycle) under license. For more than 20 years, Ducati, based in its factory in Borgo Panigale, has represented a segment, but also a true icon of motorcycle style, whose worldwide fame was fed by Valentino Rossi’s victories on the track.

After enjoying success in the late 1990s, due in part to Monster Dark, the most sold motorcycle in Italy between 1998 and 1999, Ducati began its transformation from a purely mechanical company to an “entertainment” company, since it offered a complete motorcycle experience—centered on the technological excellence of its motorcycles, but extending to races, accessories, and clothing. The turnaround reached its peak on March 24, 1999, with the ingression of the title Ducati Motor Holding onto the New York and Milan Stock Exchanges.

ducati

In 2005, however, the situation was grim: the balance sheet closed with 41.5 million in losses, and the group, which was controlled at the time by the American investment fund Texas Pacific Group, was unable to respect its financial agreements, in compliance with financing undertaken with a pool of banks for 100 million. From the industrial point of view, Ducati remains a major player in its niche market, distinguished by strong product characterization and substantial loyalty to the brand, by virtue of its significant technical patrimony and the image it acquired in the world of racing competitions.

In 2006, Andrea Bonomi’s Investindustrial fund bought Ducati Motor Holding from Texas Pacific’s American investment funds with an alliance made in Italy. Bonomi got to work on a plan for restructuring to be implemented by 2008, which called for reexamination of the model of client acquisition through the repositioning of the brand with premium models, as well as increased efficiency. The objective was to improve sales volume, margins, and liquidity, through an increase in sales of high-end motorcycles from the Ducati product range and the reduction of the structure of costs. In 2007, three new models were launched on the market (the 1098, the Hypermotard, and the Desmosedici), Ducati won its first title in the MotoGP Championship thanks to Casey Stoner, and the group left Wall Street. At the end of 2008, Ducati was delisted from the Milan Stock Exchange, as well.

In 2012, Investindustrial ceded 100% of Ducati Motor Holding to the Audi group, which employed the Italian associated company Lamborghini as a vehicle. Today, the model of development promoted by Audi is based on accompanying the brand. The group’s strategy pursues, not a radical integration, but a valorization of the individual brands.

From within a large German group, Ducati’s heart remains Italian—as does much of its supply chain, which is substantially unchanged with respect to the period prior to its German acquisition: 65% of purchases in Italy (one quarter of the total in Emilia Romagna), 8% in the rest of Europe, 11% in Japan, and the remainder in the Far East.

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