This dosent look to good
Ducati cuts production and salaries
By Vincent Boland in Milan
Published: August 12 2009 03:00 | Last updated: August 12 2009 03:00
Ducati, the Italian motorcycle maker, is cutting production this year and senior executives have taken a pay cut as the downturn shrinks the market for luxury models.
Along with other Italian luxury goods makers, Ducati is feeling the pinch as customers reduce spending on high-end goods such as the top-of-the-range motorbikes the company makes.
Gabriele Del Torchio, chief executive of Ducati, said in an interview with the Financial Times that the market for luxury bikes had probably shrunk by about 30 per cent in the six months to the end of June.
The decline was most evident in the US, where he estimated that sales had fallen roughly 50 per cent.
A Ducati bike costs between €8,000 ($11,300) and €38,000 depending on the model.
Mr Del Torchio said the mid-price range of bikes was the bracket affected most by the recession.
"I don't see signs of recovery before the spring of next year," he said.
Ducati's main markets are the US and Italy, which between them account for about half of sales and revenues.
An estimated 80 per cent of Ducati's US customers used credit finance to buy bikes, and "it's very difficult to get credit", he said, speaking at Ducati's manufacturing plant on the outskirts of Bologna.
He expressed confidence in Ducati's financial performance.
The company, which is controlled by InvestIndustrial, an Italian private equity firm, had revenues of €470m in 2008 and made earnings before interest, tax, depreciation and amortisation of €76.5m.
He said revenues in 2009 would be close to €400m, though he hoped the ebitda margin would be higher this year than last.
Senior executives at Ducati have taken a 10 per cent cut in their pay and will not receive any bonuses because of the decline, while Mr Del Torchio said he had taken a 20 per cent pay cut.
Mr Del Torchio said Ducati's objective in 2009 was to reduce its inventory - the stock of motorbikes held at the plant and by dealers - while production was reduced to about 34,000 bikes for this year. Last year it sold a record 42,800 bikes.
"The biggest risk is to push rather than pull. I'm not pushing sales," he said.
At the same time, the decline in the market for luxury bikes was allowing Ducati to raise its market share from about 5.5 per cent in 2008 to roughly 7 per cent in the near term.
Ducati's distinctive red bikes - other colours are available - are a fixture not just on the roads but at racing tracks. Racing is central to the company's image among the ducatisti .
Mr Del Torchio said Ducati invested about 10 per cent of its annual revenues in its racing business, and that there was a direct relationship between winning races and the number of bike sales.
Ducati cuts production and salaries
By Vincent Boland in Milan
Published: August 12 2009 03:00 | Last updated: August 12 2009 03:00
Ducati, the Italian motorcycle maker, is cutting production this year and senior executives have taken a pay cut as the downturn shrinks the market for luxury models.
Along with other Italian luxury goods makers, Ducati is feeling the pinch as customers reduce spending on high-end goods such as the top-of-the-range motorbikes the company makes.
Gabriele Del Torchio, chief executive of Ducati, said in an interview with the Financial Times that the market for luxury bikes had probably shrunk by about 30 per cent in the six months to the end of June.
The decline was most evident in the US, where he estimated that sales had fallen roughly 50 per cent.
A Ducati bike costs between €8,000 ($11,300) and €38,000 depending on the model.
Mr Del Torchio said the mid-price range of bikes was the bracket affected most by the recession.
"I don't see signs of recovery before the spring of next year," he said.
Ducati's main markets are the US and Italy, which between them account for about half of sales and revenues.
An estimated 80 per cent of Ducati's US customers used credit finance to buy bikes, and "it's very difficult to get credit", he said, speaking at Ducati's manufacturing plant on the outskirts of Bologna.
He expressed confidence in Ducati's financial performance.
The company, which is controlled by InvestIndustrial, an Italian private equity firm, had revenues of €470m in 2008 and made earnings before interest, tax, depreciation and amortisation of €76.5m.
He said revenues in 2009 would be close to €400m, though he hoped the ebitda margin would be higher this year than last.
Senior executives at Ducati have taken a 10 per cent cut in their pay and will not receive any bonuses because of the decline, while Mr Del Torchio said he had taken a 20 per cent pay cut.
Mr Del Torchio said Ducati's objective in 2009 was to reduce its inventory - the stock of motorbikes held at the plant and by dealers - while production was reduced to about 34,000 bikes for this year. Last year it sold a record 42,800 bikes.
"The biggest risk is to push rather than pull. I'm not pushing sales," he said.
At the same time, the decline in the market for luxury bikes was allowing Ducati to raise its market share from about 5.5 per cent in 2008 to roughly 7 per cent in the near term.
Ducati's distinctive red bikes - other colours are available - are a fixture not just on the roads but at racing tracks. Racing is central to the company's image among the ducatisti .
Mr Del Torchio said Ducati invested about 10 per cent of its annual revenues in its racing business, and that there was a direct relationship between winning races and the number of bike sales.