Cycle News - Archive Issues - 2000's

Carlo di Biagio then in July 1998, TPG borrowed funds from a merchant bank to buy the remaining 49 percent owned by the Castiglionis. This left TPG with 90 percent of the company equity - until in March 1999, Ducati Motor was floated on the stock exchange. But what was offered in the market then was the proportion of Ducati stock whicl1 TPG had had to borrow against in order to finance its purchase. That left them still holding the original 41 percent - but this was diluted down to 33.5 percent when we raised more capital via an IPO, by creating more shares which we sold for cash on public offer. So TPG are still our largest shareholder, and have not taken any money out of the company beyond the repayment of their bank loan. Morgen Grenfell, however, did liquidate their stock at the time of floatation - but our offer was three times over-subscribed, which shows the confidence in Ducati that had already been generated by our work in revitalizing the company. But that confidence hasn't been maintained, ~udging by the share price which has slipped badly in the two years since then. ThiS is a sore point. Our share price is currently fluctuating around Euro 1.70-1.80, against a flotation price of Euro 2.90 - so we're down about 40 percent or so. That's hard to understand, given that the company has grown by between 22 percent and 29 percent in each of the three years - that's a substantial amount which is much better than promised to our investors, and the profit has been around 17 percent each year, so it's better than keeping your money in the bank! But because there's very little trading in Ducati shares - people seem to want to hold on to them and ride along with us as we grow the company - the share price fluctuates quite wildly when someone starts buying, going as high as Euro 3.70 a couple of times. We agree with the position taken by several market analysts, that the current share price doesn't reflect the true worth of the company. DO you perceive Ducati's involvement with racing as a necessity or a luxury - and now that it's been announced that the company will go Grand Prix racing in the new GPI four-stroke class, where does that leave your involvement with World Superbike - in the hands of your customers? Racing for Ducati has always been part marketing, part technical research - because whatever we tryon the racetrack sooner or later comes on the street. It's fundamenlal to our business ethos, and an integral part of Ducati's customer appeal - so there's no doubt that Ducati will continue to race forever. We have to. However, when we heard the news about the new four-stroke class in GP, we needed to pause and consider - because while 500cc GP racing was only for two-strokes which had no possible street spinoff, it represented no challenge to our position. But at the stage it was positioned via the rule changes as a threat to Superbike, we had to seriously consider that at some stage in the future, there might be one or more manufacturers who would put replicas of their GP racers on the road. Suddenly, you're faced with the threat that, for the high-end customers who want to ride the top performance streetbike explicitly derived from the one they see racing on their TV screens every week, you run the risk of losing what you had before, which is being the world's numberone manufacturer of racebikes with lights, of street motorcycles closely related to the world-class racers. It was a tough decision, especially because it seemed we could only go GP racing with a V-twin, and that handicaps you right away against the Q A Q A 22 OCTOBER 31,2001 • cue • _ n multi-cylinder competition. wasn't it therefore appropriate for Ducati to use its involvement in GP racing as a means of developing a new three- or four-cylinder product line - especially as you've already produced the nextgeneration V-twin Superbike engine, in the form of the Testastretta? well, yes - I'll admit we thought about it, but our heritage is two cylinders, even if there are prototypes of three- and four-cylinder engines from 25 years ago in the museum next door to us. It's a long time since we produced anything except a V-twin but still, we weren't sure what to do until we had the idea of asking the people who really make the decisions round here, via their checkbooks - and that's our customers. We used our www.ducatLcom website to throw it open for discussion, and we had a fantastic response, with more than 5000 answers in just four daysl And it wasn't just a single one-line question with a yes or no answer, either - this was a 28-point questionnaire, which the vast majority of respondents answered in full, so we got some absolutely brilliant feedback which underlined the depth of the commitment of the people out there to Ducati, and our activities. However, the answer to our dilemma was made very clear - practically unanimously, in fact. Number one, you cannot leave World Superbike - you absolutely have to stay in this glorious and spectacular form of racing. But, two, where there is another form of four-stroke racing that attracts all the top manufacturers, you must contest this with the radical and distinctive kind of technology that is Ducati's trademark. So - we will! But we were also told, "Don't go there unless you're going to win." So, we will have an all-new V-twin engine which we hope will still retain our trademark 90degree format, but taken to the absolute extreme. But what happens if you can't win with a 90degree V-twin against the V-five Honda or Vfour MZ or four-cylinder Yamaha or Sauber and Aprilia triples? Will you insist on retaining Ducati's trademark format at all costs? Let's make one thing clear - Ducati is not going GP racing just to make up the numbers. We will not let anything stand in the way of winning - we'll do whatever is necessary to repeat our World Superbike success in GP racing. If that means adopting a 75-degree V-twin engine layout instead of our trademark 90-degree one, of course ~e'll do it - and the same goes if we conclude that a twin-cylinder machine can't become a winner: we'll build a triple, or a four, or whatever machine we believe we need to make to take the checkered flag first with the Ducati name on the fuel tank. Our chief engineer Luigi Mengoli now has an extremely sophisticated but also very accurate computer simulation program which allows his engineers to forecast to within a margin of 2 percent how much horsepower a new engine design will give, without a single part of it existing in metal. But there's more we can also put that engine, still in virtual guise only, existing uniquely on the computer, on any given racetrack and measure how much time we lose or gain on each given sector of a single lap, against a rival comparative design - or our own current Superbike. We already know thanks to this simulation capability that, on certain tracks we don't already run at, we can lap faster with our existing Superbike than current 500cc two-strokes - and, of course, we already lap faster in reality than the GP bikes at several of the few circuits we do both race at. So, I think our V-twin option will be very successful in GPl, especially being lighter and easier on tires, as well as more maneuverable and less tiring to ride. Q A Q A __ • HOW far along is the Ducati GPt pro~ect? Will it be ready to race next season? we're still working mainly on the computer, testing the best configuration. Once that's been determined, we'll build the prototype - but we decided we will only enter a GP race when we know that we're in a position to win, irrespectively of how long that takes. World Superbike remains our top priority, and we're already working on the 2002 version of the current bike, with the objective of increasing our engine's power output by 5 hp or so from one year to another, as customarily happens. This year was a big blip, of course - we got 10 hp more with the introduction of the Testastretta, and we will continue that route of development, with the possibility of more power via higher revs thanks to a different bore and stroke, which of course we will feed through to our customers on both street and track, as we always did in the past. You know, Superbike is still such a beautiful race, absolutely different from GP. When you watch the Superbike class, you know that in one race we at Ducati can be winning, but in the next one it's turned around and somebody else is going to be the victor. There's such an element of uncertainty about it, which is one of the things that makes it such a great spectacle - but when you look at the GP, you know that Valentino Rossi is in eighth place and five laps later he's going to take the lead and win, because he has such a better machine than anyone else, as well as being a superlative rider. It was the same for five years with Mick Doohan, which I think is one reason why so many fans around the world suddenly discovered Superbike. There's no uncertainty, no element of surprise in GP that is constantly there in Superbike, because the machines are all so equal. But with the introduction of the four-stroke GPI class as a direct response to the success of World Superbike, is Ducati's only interest in taking part in this as an insurance policy against its commercial success - or will it also serve as an arena for developing the next generation of V-twin Superbikes? That could well be so - but it depends also on the future direction of Superbike, where although there is an agreement not to change the regulations significantly until 2004, there are discussions we are a part of about fine-tuning the existing rules as a reaction to the GPI class. Whatever new rules are introduced will always represent a step into the unknown, because for example if you allow our V-twins to measure 1200cc and the four-cylinder bikes 1000cc, or make it a universal 1000cc capacity limit irrespective of the number of cylinders and try to even things up with restrictors, you may end up favoring one group much more than another, which puts the success of the category at risk. I would personally like to keep the formula just as it is at present - it's so beautiful. But whatever changes are agreed on, Ducati will be there on the grid for any future Superbike class - it's a fundamental part of our heritage. As for GP, we'll only join in when we know we can seriously compete for first place in the results table. What are the comparative costs of the two forms of racing, as budgeted for by Ducati? Do you expect one to be significantly more expensive than the other? The actual costs of running the race team are offset by outside sponsorship, so that washes out irrespective of the class. But for GPI technical development against Superbike, we have budgeted for an additional Ure 30 billion [about $15 million] over three years - and th.at's about five times more Q A Q A Q A

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