A few weeks ago Ducati posted their sales figures for the past year.

Revenues for 2005 were Euro 320.8 million, down 11.7% compared to 2004. This was due to the reduction in motorcycle volumes, combined with an unfavourable mix. Revenues from motorcycles for the period decreased 13.1% to Euro 247.2 million and accounted for 77.1% of total revenues. Motorcycle-related products, including spare parts, accessories and apparel, were Euro 70.4 million, down by 3.8% over previous year.

Gross margin for 2005 amounted to Euro 58.5 million or 18.2% of revenues versus Euro 86.7 million or 23.8% last year, caused by a reduction in motorcycle volumes, a negative product mix and as well as extraordinary devaluation of approximately Euro 15.0 million.

A full write up and analysis of the Ducati Earnings Report can be found at Rob Feightner’s Desert of The Real Econonomic Analysis. It’s a well written bit that breaks down the sales slump and tries to sorted it out - well worth reading if you’ve got the time…

Ducati mentioned “unfavourable” product mix as one reason for poor results.
Here was there motorcycle mix in 2005: Motorcycle product % Change

Superbike 6,094 / 10,213 (40.3%)
Supersport 1,030 / 1,426 (27.8%)
Sport Naked 16,585 / 18,026 (8.0%)
Sport Touring 1,397 / 2,997 (53.4%)
Multistrada 6,156 / 3,898 57.9%
Sport Classic 0 / 3,274 0 n.a.

Total 34,536 36,560 (5.5%)

Subsequently Automotive Business Review has posted an interesting article by James Walker, regarding Ducati’s recent troubles.

The gist is that while Ducati shipped more bikes to the USA, their sales in the rest of the world sank considerably and thus set them back roughly 40 million Euros…

Motorcycle shipments in North America were up 33.4% to 7,070 units in 2005, but the increase was not enough to offset a general decline in Ducati’s main European market and the rest of the world.

Total net revenues for the year totaled E320.8 million, down 11.7% on the E363.4 million posted in 2004. Losses for the firm widened to E41.5 million compared to losses of E3.5 million in the previous year. This was due primarily to a reduction in motorcycle volumes, although Ducati noted that the results also include an extraordinary devaluation of approximately E15 million.

Much has been made of the E40 million Euro loss on several of the Ducati related message boards - most of the chatter seems to based on the belief that Ducati does a wonderful job selling new bikes to previous customers but can’t seem to get people who’ve never owned a Ducati to purchase a new one. That seems like an awfully simplistic rational if you ask me - a much better one in my estimation would be that Ducati currently has a rather confused product matrix and is seemingly trapped by their consumer base.

In some ways the brand is caught in a big business catch-22, if they stray to far from tradition they will undoubtedly catch serious flack from their core traditional consumers yet if they continue to play to this constituencies whims they will never break out into the mainstream. Of course breaking out into the mainstream is a tricky deal and fraught with consequences – the more successful the brand becomes the less appeal and/or uniqueness it has and I think you’d be hard pressed to find a current Ducati customer who didn’t at least minimally enjoy the fact that their bike was ‘just a bit different then the norm’.