Why are Ducatis so expensive?

onevcs · 08-07-2006, 1:01 PM

wouldn't it make sense to lower their prices, lower their percentage gain margin, and increase sales quantities?

They seem to be enjoying a "Ducatis are cool" era even with a lack of performance in spite high end parts being used on their production bikes.

I don't get it

20,000 approx for a bike that's out performed by other almost half that price....
Are my assumptions wrong somewhere or am I just dead wrong...

I don't know

, perhaps I'm not only just full of sh*t like my wife says and there room to somehow add misconception to the smelly mix...

I'm not pulling a "Red Rider" I'm I?

JBODIE · 08-07-2006, 1:12 PM

Everything European is expensive from beers to cars. So why not bikes?

Japan outperforms Europe in general. Europe whoops Japans ass in styling and craftsmanship hands down and owning a Ducati is like owning a Harley. You can now name drop and are less likely to run into someone with same bike. My

bwhip · 08-07-2006, 1:14 PM

I think they understand that there is a delicate balance involved. They take advantage of the fact that they do well as a niche player, and don't try to compete directly with the major Japanese manufacturers. By lowering their prices, it might help them sell more bikes, but they would risk losing their status and exclusivity (real or imagined).

People that buy Ducatis generally aren't looking for value in terms of performance vs. dollars spent. They are buying Ducati because they enjoy having something different, something you don't see parked in front of every 7-11, something that still performs extremely well, sounds great, and makes them feel a member of a very exclusive club.

Remarkably, for Ducati to lower their price to sell more bikes could actually risk losing the very market they normally attract. I'm sure Rolex, BMW, and others could sell their wares for less as well, but they understand their market.

CBR929RE · 08-07-2006, 1:19 PM

you know how much it costs for a relatively small company like that to run such an expensive MotoGP campaign?

JBODIE · 08-07-2006, 1:20 PM

Well said ,BWHIP!

JBODIE · 08-07-2006, 1:22 PM

Quote:

Originally Posted by CBR929RE

you know how much it costs for a relatively small company like that to run such an expensive MotoGP campaign?

Don't know how much it cost but i am sure sponsors help cut the cost a lot.

BDA116 · 08-07-2006, 1:32 PM

Because they can.

Baketech · 08-07-2006, 1:39 PM

Quote:

Originally Posted by onevcs

wouldn't it make sense to lower their prices, lower their percentage gain margin, and increase sales quantities?

Why would any company choose to sell more units to make the same money...

ray916mn · 08-07-2006, 1:47 PM

Low production volumes.

Ducati is not a mass production company. Amortizing engineering, tooling, marketing, homologation and all other costs which go into producing and marketing a motorcycle make a low production volume machine more expensive to produce. When you make 10,000 or less per year of a bike than when you make 100,000 per year of a bike for the fixed costs of making a bike, each low volume bike has 10 times the cost. With respect to variable costs, you also pay more as a manufacturer when you go to a component manufacturers like Showa, Bridgestone, Nissin, DID, Marvic or Nippon Denso for sub assemblies, because you can only commit to buy 10,000 of something versus 100,000.

Exclusivity has it's costs, and the benefits are most often a matter of taste as opposed to a matter of performance.

Could Ducati out produce Honda, Yamaha, Suzuki or Kawasaki, all of which make tons of products which require virtually the same engineering resources, tools, suppliers, and production? Sheesh even companies with the scale of Daimler Chrysler, Ford and GM, and VW are hard pressed to compete with Honda. Ducati is much better off playing a game with rules and scale advantages that high volume producers can't or won't bother to compete with.

Heavy-Dee · 08-07-2006, 1:50 PM

Quote:

Originally Posted by Baketech

Why would any company choose to sell more units to make the same money...

Best post ever.

- MBA Student

Heavy-Dee · 08-07-2006, 1:53 PM

Quote:

Originally Posted by ray916mn

Low production volumes.

Ducati is not a mass production company. Amortizing engineering, tooling, marketing, homologation and all other costs which go into producing and marketing a motorcycle make a low production volume machine more expensive to produce. When you make 10,000 or less per year of a bike than when you make 100,000 per year of a bike for the fixed costs of making a bike, each low volume bike has 10 times the cost. With respect to variable costs, you also pay more as a manufacturer when you go to a component manufacturers like Showa, Bridgestone, Nissin, DID, Marvic or Nippon Denso for sub assemblies, because you can only commit to buy 10,000 of something versus 100,000.

Exclusivity has it's costs, and the benefits are most often a matter of taste as opposed to a matter of performance.

Economies of scale are one reason the cost is so high. So you are correct. But if you are trying to make the argument that they should produce more to lower the marginal cost, than I disagree. Like Bake said, why produce more, to charge less, and make the same amount of money?

Build less, charge more, and preserve the "soul" that Duc owners are looking for.

HD

luvtolean · 08-07-2006, 1:53 PM

Quote:

Originally Posted by Baketech

Why would any company choose to sell more units to make the same money...

Well...that is not necessarily what he was saying...but even if it was, there are reasons to do that.

Edit: But not in the case of Ducatis. Ducatisti, just like Porsche or Ferrari-philes, don't want their beloved machines to be cheap enough for the plebeians...

DevilDawg · 08-07-2006, 2:01 PM

Do some research into the Ducati lineage and design and that will give you an idea of why they are so expensive. Its more than just exclusivity, but that is a part of it. You can still own a Duc for less than ten grand and have a nice bike (see Monster), but owning a motorcycle that employs the desmodronic valve design and does it with dependability isn't exactly cheap. This isn't to say that they couldn't trim their profit margins a bit, but they are just as happy to not do it and maybe not have you buy one. Their target demographic isn't Joe Average Biker. That's one of the reasons when I decided on a V-Twin, I have an RC51 and not a 996. Not that I consider myself Joe Average (maybe Joe Slightly-Above-Average with the penchant for occasionally settling), but Honda did a better job of making their motorcycle appealing to me at the moment.

onevcs · 08-07-2006, 2:03 PM

Quote:

Originally Posted by bwhip

I think they understand that there is a delicate balance involved. They take advantage of the fact that they do well as a niche player, and don't try to compete directly with the major Japanese manufacturers. By lowering their prices, it might help them sell more bikes, but they would risk losing their status and exclusivity (real or imagined).

People that buy Ducatis generally aren't looking for value in terms of performance vs. dollars spent. They are buying Ducati because they enjoy having something different, something you don't see parked in front of every 7-11, something that still performs extremely well, sounds great, and makes them feel a member of a very exclusive club.

Remarkably, for Ducati to lower their price to sell more bikes could actually risk losing the very market they normally attract. I'm sure Rolex, BMW, and others could sell their wares for less as well, but they understand their market.

I see your point

... still it does not make sense to me...

if they want that "exclusivity club" status they should back it up with real top notch performance, Ferrari style, otherwise they might end up having sales problems as BMW bikes are having... but OK, they are definitely exclusive... for now. I'd hate to see them disappear.

Heavy-Dee · 08-07-2006, 2:03 PM

If I had the coin to blow, I'd buy this right now and ride it occasionally and display it normally.

HD

Heavy-Dee · 08-07-2006, 2:05 PM

Quote:

Originally Posted by onevcs

I see your point

... still it does not make sense to me...

if they want that "exclusivity club" status they should back it up with real top notch performance, Ferrari style, otherwise they might end up having sales problems as BMW bikes are having... but OK, they are definitely exclusive... for now. I'd hate to see them disappear.

It's more than exclusivity. It's "character" per Harley Davidson. Same concept. Duc's have "soul" and "sex appeal" but are not American made, appealing to typical American Sloth crusier type pile of metal.

RRWANTR · 08-07-2006, 2:05 PM

Quote:

Originally Posted by Baketech

Why would any company choose to sell more units to make the same money...

He didn't really say that....you can sell more at a lower cost and make more money....

onevcs · 08-07-2006, 2:13 PM

Quote:

Originally Posted by Heavy-Dee

If I had the coin to blow, I'd buy this right now and ride it occasionally and display it normally.

HD

If I had that kind of money I'd retire and follow the MOTOGP around the world and still ride my CBR.

Heavy-Dee · 08-07-2006, 2:16 PM

Quote:

Originally Posted by onevcs

If I had that kind of money I'd retire and follow the MOTOGP around the world and still ride my CBR.

Well, I'm not sure 20k will get you *that*. But I hear ya.

CBRVFR · 08-07-2006, 2:25 PM

Marketing 101 - Perception of exclusivity.

Ducati at $23,665 = Exclusive, hand wrought, high performance machine with a racing and historical lineage, and a marque with distinction and class. ("Did you see the write-up in the Robb Report?") The unique valve train and high-strung personality mean that the banal unwashed herd of squid with their ultra-common Japanese bikes wouldn't have the understanding, the artistic appreciation, the "touch" required for ownership. This motorcycle is built so closely to legendary racing tolerances that an occasional failure is to be expected.. and after all, the clothing dealer and the carbon-fiber vendors have to eat, too. It is part of the Noblesse Oblige of the Ducati owner to patronize such merchants in the same way that the Medicis patronized Michaelangelo. Be a good fellow and pass the Grey Poupon, that's a dear.

The same Ducati at $6500.00

Overpriced, overweight, underpowered, haphazardly designed and indifferently built POS. You could spend tens of thousands on similarly overpriced upgrades, but virtually any Japanese 600 will eat it for lunch with fava beans and a nice Chianti...

RRWANTR · 08-07-2006, 2:27 PM

Quote:

Originally Posted by CBRVFR

Marketing 101 - Perception of exclusivity.

Ducati at $23,665 = Exclusive, hand wrought, high performance machine with a racing and historical lineage, and a marque with distinction and class. ("Did you see the write-up in the Robb Report?") The unique valve train and high-strung personality mean that the banal unwashed herd of squid with their ultra-common Japanese bikes wouldn't have the understanding, the artistic appreciation, the "touch" required for ownership. This motorcycle is built so closely to legendary racing tolerances that an occasional failure is to be expected.. and after all, the clothing dealer and the carbon-fiber vendors have to eat, too. It is part of the Noblesse Oblige of the Ducati owner to patronize such merchants in the same way that the Medicis patronized Michaelangelo. Be a good fellow and pass the Grey Poupon, that's a dear.

The same Ducati at $6500.00

Overpriced, overweight, underpowered, haphazardly designed and indifferently built POS. You could spend tens of thousands on similarly overpriced upgrades, but virtually any Japanese 600 will eat it for lunch with fava beans and a nice Chianti...