Ducati plans to sell 100 bikes by Dec next year

Italian superbike maker Ducati is entering the premium bike segment in India. Yamaha and Honda are already present in the 500-unit market. Suzuki and Harley Davidson will enter next year.  Aspirations are high at Ducati, which launched its first showroom in Mumbai on Sunday. Globally, the company sells 40,000 bikes annually. And while all global automotive giants are foraying into the Chinese market as well, Ducati, which opened its showroom in Shanghai last week, is banking big on the Indian market. It will offer five bikes — HyperMotard, Monster, Fighter, SBK and Sport Classic — in 16 variants. The price will be in the range of Rs 9-43 lakh. Neha Rishi spoke to Cristiano Silei, vice-president (sales), Mirko Bordiga, chief operating officer (Ducati Asia-Pacific), and Ashish Chordia, CEO of Precision Motor India, which holds Ducati dealership, about the bike maker’s India plans. Excerpts:

How many bikes have you sold since May? Your target was 50 bikes per year…
Silei: We haven’t sold a bike yet. When we announced our entry in the market last year, we set a target of 50 units. We made a conscious decision to not start deliveries until we had our network in place, which can support the after-sales service and also support the customer. We have received a lot of enquiries in this period — close to 300 — despite the fact that we did not do any marketing of the product. Only we announced that we will be present in the Indian market. We will not stick to our target of 50 units because our target is a moving target. But starting from now to December 2010, we are looking at selling a minimum of 100 units.

Given the competition, is 100 units a realistic target?
Silei: In a market like India, which is a developing one for motorsports, competition actually helps the market to grow and we hope to reach our sales target, thanks also to the work other manufacturers are putting in to promote the development of the industry.

What sort of volumes justify bringing this product as a completely knocked-down unit?
Silei: We do not have plans for that. We are not thinking of a CKD. Right now, we are thinking of entering the market and bringing our product, services, community, clubs.

What’s the import duty one will have to pay on the completely-built unit?
Silei: Duties and tariffs come to 114%, which is very high and we hope things will change in future as we are not paying such high tariffs anywhere we distribute. But we wanted to bring brand Ducati into the Indian market. There is not much difference in the global pricing of the product with India, the only difference is the high taxes that an Indian customer has to pay.

Is it a conscious decision to enter India at around the same time as Harley Davidson?
Silei: I think we were the first ones to believe in India as a market and hence we came here a year go, well before the crisis and the economic meltdown. Our coming here was not a reaction to the conditions outside, it was a clear strategy. We believe that the Indian market will be interesting and develop faster than any other market.

Bordiga: We have our whole product range in India, it’s same as what is selling in the US and Europe. In comparison, Harley Davidson will enter the Indian market with only 4-5 products. So, we clearly have a different strategy.

Who are the Indian partners you’ve tied up with to source components from India?
Silei: We are working with some Indian partners and also with TCS on a multi-year contract. The duration of the contract still remains under discussion. There is also a possibility to source engine components from India, though we are not doing it at the moment.

Is there a possibility of tying up with an Indian partner?
Silei: No, we don’t have such plans. Ducati wants to go solo. Being a large manufacturer, we are finding our own dimension in being a volume-based strong global brand.

Would we see all the latest models of Ducati in India as and when they are globally launched?
Bordiga: Yes, there will be simultaneous launches. Unlike others players, we have the entire model range in India as you would get globally.

Ducati has set up a showroom in China last week, what sort of demand do you anticipate from that market?
Bordiga: We expect more or less similar demand in China as in the Indian market. However, the sales target will be more easily achievable in the Indian market as the culture of big bikes is far more developed here than in China. India is a more interesting market than China where we can cater to only two cities, namely, Beijing — where we will open a showroom by the end of the year — and Shanghai.

How long will the delivery of the product take?
Chordia: That would depend on the model that is most sought after. So, accordingly, we will adjust our production to meet the demand from the next quarter onwards. The bike will take around 3-4 weeks on the higher side for delivery. Within six months, we will get a clear picture as to which product should be produced more for the Indian customer.

How many dealerships of Ducati will we see and what is the cost of setting up a dealership?
Chordia: In Phase I, we will look at Mumbai and Delhi and by the end of the next year, we will cover the remaining metros and also look at Hyderabad and Bangalore. The cost of setting up a dealership is around Rs20 crore.