The introduction last year of the 1098 and the Hypermotard cemented Ducati's position as one of the more highly coveted European brands in the United States.
Consumers were further lured in by the company's retooled image. Ducati claims to have gone from being a manufacturer of high-dollar, high-performance and high-maintenance motorcycles to one that builds more accessible and reliable — yet no less premium — bikes.
It's upon these successes, and the subsequent sales increases they generated, that dealers must build the value of the Ducati franchise, CEO Michael Lock told dealers last week during the company's national sales meeting in Monterey, Calif.
"We're on more people's shopping list than ever before... We've done the first part, but it is only the first part...Generating demand is not easy, but it's really only the first piece of the puzzle," Lock said. "It's what you do with this demand."
The goal now is to bring in the buyers of other brands who may have been fantasizing about buying a Ducati, Lock said. He cited a Monterey-based dealership's success of selling 50 Ducatis in the first seven months of 2007 as an example of what's possible for dealers who fully embrace the company's brand and culture.
"We don't have to sit down with the little guys. We don't have to accept that we're another small European brand. We don't have to be those guys," Lock said.
Not only is growth needed for success, it's also what?s going to fuel investments in the OEM's business and manufacturing infrastructure, which in turn will support the additional sales volume.
Narrowed and Focused
For 2008, Ducati is narrowing its market focus by eliminating the ST touring models from its lineup. This will allow the company to focus its energy on a narrow market segment — sportbikes and traditional — what it calls the Ducati Relevant Market. It's against this definition that the company measures its sales goals and results.
To help dealers nail this market, Ducati launched a retail insurance program, an extended warranty service now available to customers, and a mystery shopper program that uses a prospect satisfaction index.
The company will also cover 100 percent of the cost of dealers participating in Ducati Management Groups. These are 20 groups run by the RPM Group. Prior to this, Ducati only subsidized those who signed up for the peer-review business program.
The Ducati Foremost Motorcycle Insurance Program lets dealers offer a variety of insurance programs to consumers, with discounts available for new buyers and members of the Desmo Owners Club. The program allows dealers who meet certain requirements to become licensed insurance agents and write Foremost Motorcycle policies, as well as the insurance company's other insurance products.
McCabe said the insurance program will help the company's dealer network bolster its F&I offering, something that was needed given that many dealers don't have F&I departments, he added. Allowing dealers to become insurance agents will help them boost sales even if unit sales are flat.
GE Money-Warranty Services backs Ducati?s new extended service contracts, which allow dealers to sell customers additional coverage on their factory warranty.
With much of the focus of the coming year being the business of doing business, Ducati offered no whiz-bang product offerings to the 300 or so assembled dealers and dealership employees. As with most Italian motorcycle companies, new model revelations are reserved for November's EICMA show in Milan.
Coming off a great year for apparel — sales leaped 140 percent from 2005 — the company added 110 new pieces to the Ducati collection. It is also continuing its branding deal with Puma footwear.
Lock pointed out that despite challenging economic times and slumping sales figures, the motorcycle market in general is still at one of the strongest points in its history. Much of the retail drop has come from the sluggish cruiser market, which doesn't have much of an impact on Ducati's target demographic, he added.
"In this framework, Ducati is doing remarkably well. We are now officially the fastest-growing brand in the motorcycle market in the U.S. And now by some distance," he said. "I think the only other company that's recording numbers like ours is Piaggio with the scooters.
"We need to keep growing this. I don't mean rabid, number-led growth. I mean quality growth," Lock said. "If we grow the quality first, the volume will follow."
Look for a detailed report on the Ducati 2008 dealer meeting — including an interview with Michael Lock — in the October issue of Dealernews magazine.