Harley-Davidson Expressing Interest in Buying Ducati?

Sources said...

ducati scrambler cafe racer static side view
Ducati Scrambler Cafe RacerCourtesy of Ducati

A Reuters news item Wednesday suggesting that VW-Audi seeks to sell Ducati and that Harley-Davidson is interested has created a buzz, but the text puts it in perspective, saying that VW, Audi, H-D, and Bain Capital declined comment while Indian automaker Bajaj was "not immediately available" for comment. The rest is "sources said." That's not much substance.

Yes, we can understand that VW might seek to lighten ship in exchange for cash in their present situation of facing expensive diesel auto buybacks and fines. We can also see that Ducati is attractive with last year's revenue of 593 million euros. Another attraction of Ducati is that, unlike major motorcycle manufacturers, it builds products for the premium market whose buyers still have money to spend. Even though it does have some lower priced bikes, Ducati does not offer the traditional full line that could be seen as a liability in these post-2008 times. Ducati shares this and one other characteristic with Harley-Davidson: Both companies market their products not as commodities (paint the 600s gray and who can tell them apart?) but on the basis of lifestyle appeal.

“Sources” tell us that investment banking advisory firm Evercore has sent information to potential Ducati buyers. The Reuters information said that Bajaj plus several buyout firms are preparing bids. Exciting?

harley davidson road king special static side view
Harley-Davidson Road King SpecialCourtesy of Harley-Davidson

Why did Harley buy MV Agusta brand, which is more a styling house than an engineering firm? It went for $109 million in 2008, whereas "sources say" VW (declining to comment) wants 1.4 to 1.5 billion euros for Ducati.

If Harley-Davidson needs engineering consultancy there is its long relationship with Porsche. At the moment Polaris with its Indian brand is constructing value from the domination of American Flat Track and some see this partially as a result of the purchase of Swissauto. Yet the H-D product most closely tied to the Porsche relationship, the V-Rod, has only a fraction of the popularity of the Motor Company's traditional Big Twins. The Big Twin's time-honored features of rolling bearings, air cooling, knife-and-fork connecting-rods, and multi-piece crankshaft are not something with which Harley needs or wants engineering help. Like the old timers used to say, "Runnin' good? Don't touch nothin'."

I’m not going to be sitting bolt upright in bed at 4 a.m. to worry about this. Let’s wait for the substance.