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N. America becomes Ducati’s top market – February 12, 2007

February 12, 2007
Filed under Features

In 2003, Ducati North America (DNA) stood a distant second in the company’s worldwide sales compared to Italy.
Fast forward three years and the separation between the two markets — 2003’s North American sales were a third of Italy’s — not only is gone, but it’s beginning to go in a new direction.
Thanks to a 16 percent growth in sales in 2006, DNA has become the Italian motorcycle manufacture’s No. 1 market. DNA CEO Michael Lock said North American sales topped 8,200 in ’06, barely eclipsing the Italian market by a few dozen bikes.
“In fact, we would’ve beaten (Ducati’s Italy sales) by a lot more if the factory had decided to give us any 1098s before Christmas,” Lock said.
Those early 1098s instead went to Europe, but the slightly longer waiting time means a possibly huge 2007.
“We’re on course now to break 10,000 this year and we’ve never gotten close to that,” Lock said in a phone interview from New York, where he was set to show off Ducati’s new lineup in what has become an annual party.
The possibility of reaching 10,000 is not only a huge step from the 2003 numbers, which were approximately 4,000 — but a nearly 40 percent increase over 2005 sales in North America. The sales growth also is evident in the Canadian market, which has tripled its sales since 2004.
Driving the sales growth in 2007 is the 1098, the sport bike that was introduced in Milan, Italy, in November. The 1098 comes with a new 160hp engine that is more than 11 pounds lighter than its predecessor. It’s the first production motorcycle, according to Ducati, to have Brembo Monobloc brakes. Plus the 1098 S, the high-end model, comes with a data acquisition system that allows performance analysis.
Lock said North American dealers were so hyped when they saw the 1098 last summer in Salt Lake City they ordered 4,000. That number’s since been reduced to 3,000 because of Ducati’s production restrictions. Still, Lock said, by the time the 1098s arrive in U.S. showrooms in February, it’s likely they’ll already be sold out. In fact, by mid-January, some of Ducati’s largest dealers had already sold their ’07 allotment.
“That bike is plastered across newsstands and airports all over the country at the moment,” Lock said of the 1098’s front-page coverage in recent editions of motorcycle consumer magazines. “It’s another reason why I think we’ll be sold out by the time they arrive.”
Is that cause for concern for Ducati?
“We’ve learned this the hard way,” Lock said of the urge to increase production to meet surging demand. “I think most motorcycle companies have learned is that you have to get your production right, which means you have to plan it out 4-6 months in advance so build quality is good and dealers know what they’re getting.
“And you know what, if you get sold out on a hot new model, ‘OK. That’s fine,’” Lock said. “But the worst thing to do is to try and scramble and change the production plan. It just goes wrong. Somewhere down the line it goes wrong. So we’ve learned that you stick to your production plan.
“And if you’re sold out, then everybody who buys one is overjoyed they have a sold-out model. And everybody who didn’t get one can put an order in for the following year model. I mean if you’re a Harley-Davidson customer, you’ve kind of done this for the past 10 years. It’s just new to us.”
Also new to DNA is an increased emphasis on parts and accessories sales. At DNA’s dealer meeting last summer in Salt Lake City, Lock emphasized to dealers that Ducati’s renewed concentration on providing parts and apparel gave them additional profit potentials. Dealers obviously took that to heart as DNA posted a 40 percent increase in its clothing business and a 25 percent rise in accessory sales. psb

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