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th.an what we would payout if we were doing Superbike only. We had to convince the board that it was the right thing to do, that this was a necessary expenditure to produce a state-of-the-art engine capable of winning GP races - and that in five or six years from this we can derive something else for the street which might interest our customers. Ducati's commercial growth in the past five years has largely been based on the same existing models that were in production when TPG took over, albeit with ongoing improvement and m.odular development - 916 desmoquattro engine into Monster chassis to create the S4, for example. You've now reached an annual production of 40,000: what's the production ceiling of the existing factory, and will you need new product lines in order to attain it? [s there a Ducati equivalent of the A-Klasse Mercedes in the pipeline - maybe a desmo scooter? well, we're still only working on a one-shift basis, so we still have the option to go to a second or even third shift if needed, and remember that while a new assembly line costs half a million dollars, we have plenty of space to install as many we may figure we need. So a 100,OOO-unit annual production is perfectly feasible - we just have to decide if this is what we need or ought to do, and so far we haven't reached a decision on that. A Ducati scooter? Well - maybe in the year 2050, but not in our present business plan. Even at the point that a Japanese manufacturer produces a 600cc twincylinder 'scooterone' [big scooter], we don't want to dilute the sportbike image of Ducati by building this kind of product. We don't intend that Ducati should ever be removed from our sporting heritage - that's definite. A Ducati is a sportbike - always was, always will be. We can try to get the customer to accept a wider boundary for our niche, like with the ST range, which I know some people think is a kind of Ducati people-mover, not a two-wheeled Ferrari. Well, I ride one every day, and I know how a practical but sporting bike like this grows on you, because you can have fun just riding it to work without thinking you must be Carl Fogarty as you do so. This is what we have to do in other directions - go out and reach consumers who are on the boundaries of our niche in the market, with the unique Ducati approach to a type of bike we haven't yet offered on the marketplace. We'll have the prototype of just such a model on display at Milan in September - something quite fresh, which is the Ducati Way of building a kind of bike others already do, but with less excitement. WOUld this policy extend to producing a desmo V -twin sport cruiser, primarily [ suppose for the American market, in the same way as Harley-Davidson has developed the V-Rod out of its VRlOOO Superoike? That's not something we're working on at present, but I can't deny such a model might fit well within our future business strategy. It's a type of bike for which there's a substantial market, which we may well decide to address in the future. [S that why you tried to purchase Moto Guzzi? Was it a big disappointment that Aprilia beat you to it? A Q A Q Yes - we came very close, and it would have been an excellent investment for Ducati. We could have done great things by joining such a historic marque as Moto Guzzi to the living success story that is Ducati. HOW about a dual-sport bike - a desmo V-twin answer to the Honda Varadero? That's a different matter - such a bike is indeed within our business strategy, and I confirm we're working on such a model. Anyway, we went down that road 30 years ago already with the 450 Scrambler, so we're reviving our heritage! In any case, my aim is that we should capture the scooterone owner who has outgrown a scooter, even a 600cc twin-cylinder one that cruises at 130 kph [80 mph] on the Autostrada, which he bought because he can cruise with it at weekends in the country, use in town, but has more performance and goes faster. But what does he buy when he outgrows that? I don't think he buys a Monster, which is a young bike for riding hard - but what can he get that is sporting, but sensible, which gives the enjoyment of biking? That's my dream - to develop such a model with the heart of a Ducati. Will we ever see a Supermono Strada? A Q A Q We have it in our design drawer, along with many other projects, and one day it may well be dusted off and redeveloped. But for the time being I think we will continue to focus on new twin-cylinder products. Does that mean the long-awaited replacement for the 9l6? What's the status on that? YOU know, Tamburini designed the 916 back in 1992 - and it's still a design icon, the dream of so many bikers to own. Therefore, it's extremely difficult, even pointless, to simply kill it off - so I can say here and now that the 996, its ultimate evolution, will remain in production into the foreseeable future. Of course, if we want to grow, we must continue to come up with new products, so I can say that work is well advanced on the next generation of Ducati Superbike. We already introduced the heart of such a product in the form of the 996R powered by the new Testastretta engine, and this has performed very well in the World Superbike Championship so far this year. But there's more to come.... A Q A Q But the 996R, even though an interim bike with the new engine in the existing 996 chassis and bodywork, was only offered this year as a costly limited-edition model available exclusively over the internet. Will you put it into volume production at lower cost for 2002? I think you can answer that yourself just by looking at the past history of Ducati. .. ! After the success of the 996R, and now of the 54 Fogarty Monster, both sold as limited-edition Internet models but incorporating technical and performance improvements over the models they're descended from, does Ducati plan to make such Web site products an integral point of its marketing strategy? The short answer is, yes. With the MH900e, we saw the benefits of putting a global brand name like Ducati together with a global marketing tool like the Internet. The result sold way beyond our expectations, and the fact that over 50 percent of the sales were to Japan, much more than the existing Japanese share of our total sales, demonstrated the validity of this concept. We will intensify our e-commerce activities in the future. Rumors have circulated recently that Aprilia and Ducati have been in discussions about joining forces - if not in an outright merger, then at least in a kind of joint venture. Is there any truth in this? Rumors are always fiying around, some of which have a basis in fact, others not. But I would say this: At a time when Piaggio has acquired Derbi and seems to be on the way to assuming control of MV Agusta, there is an overdue need for consolidation of the European bike industry. Against the four Japanese brands [this interview took place before the news of the Suzuki-Kawasaki alliance], are ranged one American company, and anything up to 12 or 15 serious European manufacturers, which in terms of combined turnover don't equal the largest of the Japanese. At a time when so many other industries are consolidating, from automotive to banking to airlines to foodstuffs, you have to ask yourself why it isn't yet happening in motorcycles - but we all know it must. The potential benefits of corporate synergy in just the R&D area alone make this beneficial pure development costs for new engines alone are sky-high, let alone the cost of meeting updated government regulations or developing new fuel-efficient technologies, before you start considering the economies of scale in joint purchasing or distribution. We could even use such a synergy to expand our product range by adding, say, a dirt-bike product lineup by linking with a specialist producer of such models. There are many potential advantages from closer links with other companies, short of an outright merger or front-office joint venture. So, bearing this in mind, where do you see Ducati in five years time? Where would you like the company to be positioned? A company that delivers products to the street customer which convey the same emotion and thrill as you get from riding the bike on the racetrack. That's our mission today, as it has been for so many years, and I don't want that to change. It goes to the heart of what Ducati is all about. eN A Q A Q A Q A cue I • n _ _. • OCTOBER 31, 2001 23