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Harley-Davidson enters race to buy Ducati from VW


Bill_Walker

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Bill_Walker

"U.S. motorcycle maker Harley-Davidson is lining up a takeover bid for Italian rival Ducati, potentially bringing together two of the most famous names in motorcycling in a deal that could be worth up to $1.7 billion, sources say.

 

Indian motorcycle maker Bajaj Auto and several buyout funds are also preparing bids for Ducati, which is being put up for sale by German carmaker Volkswagen."

 

Harley-Davidson Enters Race to Buy Ducati

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Didn't HD once own MV Augusta? Remind me again how that worked out.....

Oh, and there's that Buell thing.

Edited by shuber
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Afternoon__

 

Makes sense to me, Harley will buy Ducati, then Harley won't support the Ducati side, the dealers sure won't support or try to sell the Ducati side, the mainstream Harley customers won't support or buy the Ducati so in 3 years an aggressive company will be able to buy the Ducati brand name for 20 cents on the dollar.

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Afternoon__

 

Makes sense to me, Harley will buy Ducati, then Harley won't support the Ducati side, the dealers sure won't support or try to sell the Ducati side, the mainstream Harley customers won't support or buy the Ducati so in 3 years an aggressive company will be able to buy the Ducati brand name for 20 cents on the dollar.

 

SO VERY TRUE!

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As I posted on FB, I hope not as the world is running out of chromium.

:eek:

If they could quickly sell the motto "shiny bikes saves lives" they may have something. :grin:

95c7c13cc1522caf542eaad949d6e61b.jpg

 

Pat

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Can you say Buell? Buy them, shut them down...one less bike to deal with their lead sled.

Edited by Skywagon
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If VW sells Ducati to HD I guess we won't be seeing a Monster with a cheating turbodiesel but we may see one with floorboards?

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There are a lot of possible reasons.

High ranking for Ducati dealerships

 

Then there is this.

BMW sales world wide and the 1000RR outsells the RT

 

So, world wide, in 2015 the S 100 RR was BMW's #1 seller.

Perhaps Ducati makes a sport bike?

Perhaps HD see's a process where they can take a product, Ducati, that already ranks near the top in customer dealer satisfaction, and, expand that base with conquest sales from existing HD customers.

 

True, HD has mangled things before.

But, I think that when you look at what bikes are selling, BMW for examplw sold almost as many R9t bikes as R 1200 RT's (surprise to some around here I'm sure), and the GS/GSA models are with the 1000RR as the top three, well, buyers are communicating.

 

Time will tell, but I expect some conquest sales, if for no other reason than the buyer can.

I expect HD's massive marketing to find a way to paint Ducati as an acceptable addition to the stable.

I expect that world wide, HD's massive presence will be furthered with the association.

USA is one market.

Not BMW's biggest.

We sometimes for get that.

Harley Ducatison T shirt anyone?

Edited by tallman
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Shiny Side Up

HD had better do something.

The market that they appeal to is aging. As a whole, most younger folks are not interested in HD - too slow and cumbersome. The folks who stay on HD's are getting old and soon won't be able to hold them upright!

Look at the committed HD riders - they are lifelong customers but time is catching up to them.

 

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I see zero crossover buying from HD's current customer base. Most HD customers are motivated by nostalgia. Ducati flirted with that with the Paul Smart bike, but it wasn't a big seller (here, at least) because most Americans know very little about the history of European motorcycle racing. Also, there's a thread of anti-intellectualism that flows through the philosophy of HD that is anathema to a company that's trying to improve its racing results through aerodynamics. If HD were to acquire Ducati, it would be to pump and dump it, or strip out the profitable dealerships and distributing and dump the rest. And I'm not sure the Italian government would allow that. Frankly, I'm surprised that VW would sell Ducati - it's a marquee brand, it makes a profit, it has a very loyal customer base which are all things one wants in subsidiary. I also wonder of HD can afford it; a great deal of their actual business is based on bike loans, not sales, something that they got shellacked on during the '08 downturn.

 

The future of Ducati seems to be turning more towards a V4 motor as opposed to a big twin. It would be a shame to see that brought to a close, as I assume HD would want to spend zero cash on development and try to milk Ducati's 'bling' factor instead. If this does go through, you'll probably see a bunkering mentality among the Desmo faithful, and a big fall-off in Ducati's customer loyalty.

Edited by Antimatter
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I see zero crossover buying from HD's current customer base. Most HD customers are motivated by nostalgia. Ducati flirted with that with the Paul Smart bike, but it wasn't a big seller (here, at least) because most Americans know very little about the history of European motorcycle racing. Also, there's a thread of anti-intellectualism that flows through the philosophy of HD that is anathema to a company that's trying to improve its racing results through aerodynamics. If HD were to acquire Ducati, it would be to pump and dump it, or strip out the profitable dealerships and distributing and dump the rest. And I'm not sure the Italian government would allow that. Frankly, I'm surprised that VW would sell Ducati - it's a marquee brand, it makes a profit, it has a very loyal customer base which are all things one wants in subsidiary. I also wonder of HD can afford it; a great deal of their actual business is based on bike loans, not sales, something that they got shellacked on during the '08 downturn.

 

The future of Ducati seems to be turning more towards a V4 motor as opposed to a big twin. It would be a shame to see that brought to a close, as I assume HD would want to spend zero cash on development and try to milk Ducati's 'bling' factor instead. If this does go through, you'll probably see a bunkering mentality among the Desmo faithful, and a big fall-off in Ducati's customer loyalty.

 

Morning Antimatter

 

I agree the HD based rider is not interested in the Ducati & the HD rider "large herd" mentality doesn't fit well the Ducati sporting ride qualities. (this was pretty evident when HD tried to mix with more sporting Buell)

 

 

 

 

 

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I would much prefer one of the private equity firms (who are flush with cash) give it a go than to see HD take them on. History is replete with oil and water deals that culturally are too distinct to mesh and are not additive to either. Just look at Mercedes/Chrysler - everyone knew that would not work out. I'm sure the bean counters, advisors, and lawyers along with a few key executives made out like bandits, but the results can be terrible for the consumer, and ultimately for the business. Such short term thinking is the bane of business, yet the cycle of stupidity repeats.

 

The ends justify the means - so wishes of success to anyone who wants to take this on from Audi/VW. I'd much rather the European moto manufacturers jump in to keep them Euro-owned, but they are too smart for that. Is there another John Bloor around?

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History is replete with oil and water deals that culturally are too distinct to mesh and are not additive to either.

 

You mean like when AMF bought HD? :rofl:

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History is replete with oil and water deals that culturally are too distinct to mesh and are not additive to either.

 

You mean like when AMF bought HD? :rofl:

 

Actually, Ducati's current success is due to their acquisition by the Texas Pacific Group during the 1990's. TPG modernized the plant, updated the marketing and did a lot to change Ducati from a 'fix more than you ride' motorcycle. TPG then took Ducati public and roughly quintupled their investment. I don't think there's would be much interest from private equity because there's not as much potential upside at they would want.

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I agree the HD based rider is not interested in the Ducati & the HD rider "large herd" mentality doesn't fit well the Ducati sporting ride qualities. (this was pretty evident when HD tried to mix with more sporting Buell)

 

HD's dealer network could vastly expand Ducati distribution and service but I just don't see the clientele/markets mixing. Yeah, HDs and Ducs are both twin-cylinder motorcycles but they're worlds apart.

 

Ducati does sell more bikes than I thought:

http://www.ducati.com/news/ducati_ends_2016_on_yet_another_high__with_motorcycle_sales_topping_55_000/2017/01/16/4413/index.do

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Why are most folks assuming that HD's plan is to convert HD riders to Ducati or vice versa? Or mix marketing or clientele?

 

What if they just recognize their aging demographic and slowing sales and want in on another market? Why can't it stay functionally separate? Why do many think it's a forgone conclusion that HD will screw up the brand? Maybe they have learned something.

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Bill_Walker
Frankly, I'm surprised that VW would sell Ducati - it's a marquee brand, it makes a profit, it has a very loyal customer base which are all things one wants in subsidiary.

 

And that's why. VW needs the money to deal with their diesel emissions debacle, and Ducati is very salable and clearly not part of their core business.

 

The future of Ducati seems to be turning more towards a V4 motor as opposed to a big twin.

 

I think that's true for superbikes, but their Scrambler line seems to be a success, I see a lot of Monsters around, and they just introduced a new L-twin Super Sport (albeit based almost entirely on Monster/Hypermotard parts). An awful lot of people like the sound and feel of a twin.

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Bill_Walker

 

And that's nearly 9000 MORE bikes than H-D sold in 2016 (55,451 for Ducati vs. 46,610 for H-D)! Who would have guessed that? Interesting, Ducati did this with only 1,594 employees, vs. an estimated 6,400 for H-D.

H-D fourth quarter and annual sales report

 

The big difference is that H-D sold 26,077 bikes in the US while Ducati sold 8,787. Perhaps what H-D is really after here is a bigger presence in international markets.

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Bill_Walker

One would hope that H-D has learned some lessons from the Buell debacle, and wouldn't try combining H-D and Ducati dealerships. I could see them offering Ducati franchises to their existing H-D dealers, who need help if H-D sales are dropping, but requiring them to open separate dealerships. Existing Ducati dealers would likely be pretty unhappy about that, though.

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Hank R1200RT

Antimatter, regarding: "I see zero crossover buying from HD's current customer base. Most HD customers are motivated by nostalgia."

 

I think many HD riders are accountants looking to cultivate a bad boy image. For example, see the second ad in this collection:

(Most of the others are worth watching, too, if you have 17 minutes to spare and haven't seen it before.)

 

At this point, I doubt that anyone at HD remembers the Aermacchi days, and it is not likely that they would plan on selling a lot of Ducatis in HD stores. However, the Scrambler line is attracting lots of hipsters and wannabes, so some integration of that into the HD line might be a very shrewd move to reduce the average age.

 

But to put this in perspective, here is a post I made in June *2007* when we had the last HD-is-buying-Ducati rumor:

===============================================

Old news. Texas Pacific Group bought a big chunk of Ducati in (I think) 1995 or so, tried to get HD interested in the late nineties, and HD thought the time wasn't right for an acquisition. Many of the holders of the Ducati Motor Holdings American Depositary Rights shares bought it on speculation that HD, flush with cash, would make a cost-is-no-object move.

 

HD, not being born yesterday, didn't budge, I think eventually DMH went from 26 down to 8-ish, TPG threw in the towel, and an Eye-talian group bought their interest. Same people who own Ruffino, if they would throw in a couple of cases of Riserva Ducale Chianti I might be persuaded to buy a Duck. :o)

 

DMH is back up to the twenties now. I think HD would have moved sooner if they were really interested.

 

HD could logically buy Ducati - common well-heeled customers would be a big help. Common purchasing doesn't seem to be a big synergy to me, unless HD is going to switch to Brembos across the board, for example. Of course, they remember their experience with Aermacchi, so maybe HD is not interested in anything Italian. I think they've shown that they aren't interested if the price isn't right in any event. And they don't want another Holiday Rambler.

 

I'm kind of surprised that BMW is interested in taking on Husqvarna with no competition. KTM should probably be a buyer, if only to avoid someone with deep pockets building a competitor. But what do I know?

 

This requires attention from an MBA. Paging [an MBA who probably reads this forum].

===============================================

 

Salute!

 

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Antimatter, regarding: "I see zero crossover buying from HD's current customer base. Most HD customers are motivated by nostalgia."

 

I think many HD riders are accountants looking to cultivate a bad boy image. For example, see the second ad in this collection:

(Most of the others are worth watching, too, if you have 17 minutes to spare and haven't seen it before.)

 

At this point, I doubt that anyone at HD remembers the Aermacchi days, and it is not likely that they would plan on selling a lot of Ducatis in HD stores. However, the Scrambler line is attracting lots of hipsters and wannabes, so some integration of that into the HD line might be a very shrewd move to reduce the average age.

 

But to put this in perspective, here is a post I made in June *2007* when we had the last HD-is-buying-Ducati rumor:

===============================================

Old news. Texas Pacific Group bought a big chunk of Ducati in (I think) 1995 or so, tried to get HD interested in the late nineties, and HD thought the time wasn't right for an acquisition. Many of the holders of the Ducati Motor Holdings American Depositary Rights shares bought it on speculation that HD, flush with cash, would make a cost-is-no-object move.

 

HD, not being born yesterday, didn't budge, I think eventually DMH went from 26 down to 8-ish, TPG threw in the towel, and an Eye-talian group bought their interest. Same people who own Ruffino, if they would throw in a couple of cases of Riserva Ducale Chianti I might be persuaded to buy a Duck. :o)

 

DMH is back up to the twenties now. I think HD would have moved sooner if they were really interested.

 

HD could logically buy Ducati - common well-heeled customers would be a big help. Common purchasing doesn't seem to be a big synergy to me, unless HD is going to switch to Brembos across the board, for example. Of course, they remember their experience with Aermacchi, so maybe HD is not interested in anything Italian. I think they've shown that they aren't interested if the price isn't right in any event. And they don't want another Holiday Rambler.

 

I'm kind of surprised that BMW is interested in taking on Husqvarna with no competition. KTM should probably be a buyer, if only to avoid someone with deep pockets building a competitor. But what do I know?

 

This requires attention from an MBA. Paging [an MBA who probably reads this forum].

===============================================

 

Salute!

 

Sounds like you know more about the TPG deal than I do. When I toured the Ducati plant one of their points of discussion was that the TPG acquisition was the primary motivation to modernize Ducati's production and quality.

 

Most of my knowledge about what motivates HD riders comes anecdotally. I keep hearing that the riders buy a Harley because their dad/uncle/grandpa owned one, and they want to be just like them.

 

I do work in finance, but not in any mergers and acquisitions-related field. VW is facing a lot of fines related to their diesel emissions issue, but I'm still confused as to why they would want to sell a marquee brand that makes a profit. I can see selling something that isn't working or making money, but I think that VW would want to keep their stock price up by insuring they have as many positive cash flows as possible. Maybe this is all related to Euro-5?

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And that's nearly 9000 MORE bikes than H-D sold in 2016 (55,451 for Ducati vs. 46,610 for H-D)! Who would have guessed that? Interesting, Ducati did this with only 1,594 employees, vs. an estimated 6,400 for H-D.

H-D fourth quarter and annual sales report

 

The big difference is that H-D sold 26,077 bikes in the US while Ducati sold 8,787. Perhaps what H-D is really after here is a bigger presence in international markets.

 

Worldwide, HD sold about 260,000 bikes in 2016 to Ducatis 55,000.

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Shiny Side Up

I've asked some co-workers that are HD riders - why would you want to pay that much money for a motorcycle that is somewhat under powered, heavy and costs a fortune to have work done?

Their response? The sound - they love the sound of an HD.

Loud pipes, the slight miss, etc. "Nothing else sounds like an HD".

Then I asked, if you were shopping for a car would you buy that vehicle simply because you liked the way it sounded?

 

Deer in the headlights look...

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I've asked some co-workers that are HD riders - why would you want to pay that much money for a motorcycle that is somewhat under powered, heavy and costs a fortune to have work done?

Their response? The sound - they love the sound of an HD.

Loud pipes, the slight miss, etc. "Nothing else sounds like an HD".

Then I asked, if you were shopping for a car would you buy that vehicle simply because you liked the way it sounded?

 

Deer in the headlights look...

 

I bought my HP4 because of the color scheme and purty blue wheels,.....and, it's an HP4.

 

The Ducati sound attracted me and that would be the predominate reason I would buy an 1199.

 

I'd buy a Mustang simply because of the throaty throttle that it has, close your eyes and listen, no other car sounds like that.

 

We all have our reasons to buy what we buy or what attracts us to what. We overlook the vehicles inadequacies for the feeling the attraction gives us.

 

 

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Bill_Walker

 

And that's nearly 9000 MORE bikes than H-D sold in 2016 (55,451 for Ducati vs. 46,610 for H-D)! Who would have guessed that? Interesting, Ducati did this with only 1,594 employees, vs. an estimated 6,400 for H-D.

H-D fourth quarter and annual sales report

 

The big difference is that H-D sold 26,077 bikes in the US while Ducati sold 8,787. Perhaps what H-D is really after here is a bigger presence in international markets.

 

Worldwide, HD sold about 260,000 bikes in 2016 to Ducatis 55,000.

 

You're right. I misread the tables. In my browser, at least, the "Full Year" heading isn't lined up with the full year numbers, and makes it look like the leftmost column is labled "4th Quarter Full Year", which sounds to me like full-year numbers reported in the fourth quarter.

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Could be wanting an established distribution channel in the EU through the Duc dealers. Also HD's demographic is worse than BMW's. Too few old fart loyalists and fewer every year.

 

Already poking fun at my neighbor and asked where he would attach all those chrome skull accessories on his 916. And if he was trading in his AGV helmet for a doo-rag. He's actually pretty upset that HD would muck up his beloved brand of M/C.

 

If this happens I can't wait for the 115th ride in celebration next year. The two crowds should get along like peas and carrots! All those Ducs & Hawgs in the big parade from their headquarters to the lakefront. Loud HD pipes and Duc dry clutches, So awesome...NOT!

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Then I asked, if you were shopping for a car would you buy that vehicle simply because you liked the way it sounded?

 

Deer in the headlights look...

 

I'm generally not a "brand" person. Meaning I don't hate one brand, or feel absolute loyalty to another.

 

But Harley has sold their "brand" so well, here is another thing I've noticed that annoys me. Putting Harley stickers all over the back of your truck. So why don't they put their Ford/Chevy/Dodge sticker on the back of their bike?? One's OK, but not the other??

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But Harley has sold their "brand" so well, here is another thing I've noticed that annoys me. Putting Harley stickers all over the back of your truck. So why don't they put their Ford/Chevy/Dodge sticker on the back of their bike?? One's OK, but not the other??

 

I can answer that! Most of those with stickers on the truck....don't own a Harley!

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Shiny Side Up
...and if he was trading in his AGV helmet for a doo-rag.

 

Tell him to make sure he acquires a D.O.T. approved doo-rag...

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fourteenfour
HD had better do something.

The market that they appeal to is aging. As a whole, most younger folks are not interested in HD - too slow and cumbersome. The folks who stay on HD's are getting old and soon won't be able to hold them upright!

Look at the committed HD riders - they are lifelong customers but time is catching up to them.

 

oh my, you vastly underestimate their position. they already have the 883 to cover the entry level and added water cooled 500s and 750s. If anything they are in a far better position than Ducati and the future is not in race replicas. If anyone's client base is aging out it would be BMW.

 

my only issue with their bikes has been the weight, I have adjusted to "My 800lb Life" with a Road King but I can see lots of room for improvement.

Edited by CommuterChris
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I'm just a retired government bureaucrat, but I can see the potential upside. First, Harleycati would be unwise to try to make either into the other. But, each has a distinct appeal and set of design attributes that the other could never emulate successfully. I tend to think that the folks at H-D are probably pretty smart, and that they would maintain the distinction while perhaps realizing some economies and cross-pollination in management and technology.

 

If you'll think back just a few years, there were many BMW aficionados who were fully convinced that inline fours were the road to damnation. Shaft drives were sacrosanct. Anything that didn't look like a BMW of the sixties was suspect. But, they successfully created a hugely diverse model range that has propelled them to steadily increasing sales at a time when overall motorcycle sales are dropping.

 

It seems to me that becoming Harleycati would effectively allow them to emulate--at least to a degree--the BMW model of success, creating a diverse lineup rapidly, albeit in a different way.

 

While it is fraught with peril, it's not unprecedented for this type of approach to work. Of course, there are other suitors out there who apparently have a lot of cash in hand. I don't think Volkswagen will be as concerned about the future viability of Ducati as they will be with the size of the check. They need to sell off some assets to pay those fines.

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MIke,

Good points.

I'll skip posting it, but anyone who wants to dig can see how the demographics of HD and BMW buyers have changed since 2012-13.

During the Great Recession both marques had agitis.

Now, a transfusion has slowed, perhaps even changed, that direction.

If HD does nothing but allow Ducati to continue to provide top notch dealerships ranking highly in customer satisfaction, and improve what may be incorrect perceptions (even by those already riding) about the brand, well, that's a win.

I'd wager that before this discussion most members here would not place the RT correctly in sales ranking for BMW.

I'd also posit that most here don't understand how/where the USA fits in BMW's market scheme.

So, all of a sudden we're expets on HD?

And Ducati?

:rofl:

Would love to see an orange/black themed Ducati...

:Cool:

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Take one dog and one cat, join in holy matrimony.

 

I recall similar BS about how each would benefit the other when Mercedes took over Chrysler. This will be worse. The same tried and failed visions. I'm going to enjoy watching this as human folly never disappoints.

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Will HD have enough funding and the commitment to keep Ducati in MotoGP ? Or is this a contributing factor which would allow VW to rid itself of a costly financial commitment?

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Ducati's sales are growing double-digits and I think racing sells bikes for them so there's probably a cost-benefit and HD would be dumb to mess up that formula.

 

I don't think VW is considering a sale as ridding itself of a cost. VW needs chunks of fast cash to pay their big fines and settlements that will go on for years -- that's their huge financial commitment -- and Ducati revenue is small change compared to that urgent need.

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He looked like he rode one today in Assen. Jorge is missing the M1 and the Duc boys are starting to come into their own.

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I bought my HP4 because of the color scheme and purty blue wheels,.....and, it's an HP4.

 

The Ducati sound attracted me and that would be the predominate reason I would buy an 1199.

 

I'd buy a Mustang simply because of the throaty throttle that it has, close your eyes and listen, no other car sounds like that.

 

 

I agree with the Mustang comment. Put a set of Borla Attack mufflers on your GT and see what you get. :clap:

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Shiny Side Up
HD had better do something.

The market that they appeal to is aging. As a whole, most younger folks are not interested in HD - too slow and cumbersome. The folks who stay on HD's are getting old and soon won't be able to hold them upright!

Look at the committed HD riders - they are lifelong customers but time is catching up to them.

 

If anyone's client base is aging out it would be BMW.

 

 

Uhhhh - don't think so.

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Lone_RT_rider
if you were shopping for a car would you buy that vehicle simply because you liked the way it sounded?

 

Why yes.... I would, and have. :)

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Shiny Side Up
if you were shopping for a car would you buy that vehicle simply because you liked the way it sounded?

 

Why yes.... I would, and have. :)

 

Ok - LOL!!

Your choice - I just have to have more than that...

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