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Ducati riding high as spring riding season begins

Ducati North America CEO Jason Chinnock on first of its kind new safety features for its bikes, and why 2021 is shaping to be a big year for the Italian motorcycle maker.

Video transcript

ADAM SHAPIRO: OK, there's a joke-- and I'm not going to do the whole thing. But it starts off that Kevin is German engineering and Italian design. But look, when you're talking about the Ferrari of motorcycles, Italian engineering is pretty good, too. So let's bring in Jason Chinnock. He is the CEO of Ducati North America. And it's good to have you here because this summer-- oh, Pras is going to join us, too, by the way, Pras Subramanian, who is our essentially our vehicle expert on everything motorized. Real quick, Jason, you're adding radar to motorcycles. Why? What does that do for the rider?

JASON CHINNOCK: This is an incredible new technology that obviously has been involved in cars for many years. But we're the first motorcycle manufacturer to actually integrate it into the motorcycle itself. And what this allows, it allows us to retain our position in terms of leading in technology and safety. It provides the rider adaptive cruise control, which is obviously a nice convenience, but also blind spot detection.

And for many motorcyclists and experienced motorcyclists, there's always that concern when you're going down the highway that you might have somebody coming up behind you a little fast or if you're trying to move into a lane. It gives you a little bit of a warning prior to moving into that lane that you've got a car that's coming in approaching at a faster speed. So it really is an incredible amount of technology that the motorcycle industry has been trying to find a way to adopt it from automotive. And we're the first ones to bring it to market. And we've had quite a bit of success with it already so far.

PRAS SUBRAMANIAN: Hey, Jason, it's Pras. You know, real quick, I just want to follow up on that. I'm surprised. You know, it's a great technology. But why did it take so long for bikes to adapt cruise control, which has been out for years in cars?

JASON CHINNOCK: A big part of it is the size of the technology. In fact, if you look at a typical car, you'll see all these little sensors across the front of it, which is part of what they utilize for using radar to detect where other vehicles are moving. For us, it was just a matter of identifying something that could be used that goes in right in the front of the motorcycle or right in the back of it that can take up a reasonable small amount of real estate, yet still have the same sort of technology in terms of the benefits that you would want from this piece as well. So it took a while in order for us to get it small enough where it could actually be utilized on a motorcycle.

And then the last part is really demand. It's one of those things that even 20, 30 years ago, the first time ABS braking, anti-lock braking, was introduced into motorcycling. There didn't seem to be that same sort of demand. A lot of motorcyclists would say, I don't need ABS. I've got it right here on my wrist. But also, once we've introduced this, people are starting immediately to recognize the benefits of this. Not only from, like I said, the convenience and comfort, but safety as well.

PRAS SUBRAMANIAN: You know, you mentioned demand that we're talking about these features that riders want and want to see on their bikes. 2020 was the year that you guys had a little bit of a dip in sales. You had the pandemic and things like that. But then also, you have people that want to go outside and ride more and visit really cool outdoor areas with their bikes. How is 2021 looking for you guys as the economy slowly reopens?

JASON CHINNOCK: It's actually been excellent. In fact, we're looking at our first quarter in North America to be double the first quarter of last year. So our sales are trending very, very positively. And, you know, last year, we had a little bit of a dip in our sales mainly due to the fact that we had a loss of production. Due to the pandemic, we had to shut the factory down in Bologna, Italy for six to seven weeks. And so that's going to have an impact on how we can serve the market.

And in fact, the last half of last year was a record for us globally in our overall sales. And so, once we were able to recover the production, we immediately saw the trend of it pick back up. And you're absolutely right. For 2021, we see this almost a little bit of a pent-up demand or an overwhelming demand for people that have decided they've been sitting in the last year at home, not knowing what to do with themselves. And now, motorcycling is bucket list for a lot of people. They decided when the pandemic lifts, I'm going to seize the day. And it's time for me to learn how to ride a motorcycle or to get back into motorcycling as well.

SEANA SMITH: And Jason, speaking of 2021, I know your lineup for this year also expands into e-mountain bikes. First, just talk to me about the opportunity, why you decided to do this. And also, when it comes to e-bikes, are you hoping to turn some people that will buy e-bikes then onto your main product, which is motorcycles?

JASON CHINNOCK: Well, in the motorcycling world, a lot of professional motorcycle athletes, those that are racing and such, they train on bicycles. So there's a natural progression. And in fact, Ducati even got its start before we were making motorcycles. We actually had a little engine that would bolt to a bicycle. So there is a natural story for us to pick back up. But why e-bicycles? Well, we've decided-- well, determined that a lot of our customers, when they're not riding a motorcycle, they're into fitness, they're into training. So this gives them an opportunity to take the brand outside of, say, their normal motorcycling experiences as well.

And in terms of, will it open the door for us into the future of electric, there is that possibility. It isn't really part of the strategy right now. It's more of the opportunity that we see of being able to ensure that our brand is integrating into people's lives in other ways just besides the motorcycle themselves.

PRAS SUBRAMANIAN: Hey, Jason, so, you know, we talk about ridership here. But mostly, your customers are based in Europe, in particular, Italy. How do you increase ridership here in this country, a huge market? Is it through electric bikes and motorcycles? Is it through technology that you're adding to new bicycles? How do you get that kind of vibe that you're going higher here?

JASON CHINNOCK: I think in the world of motorcycling in North America, we really have an opportunity to kind of hit it on a different-- handful of different levels. The first one really is the product and having product that's accessible to people that are interested in motorcycling, but also being able to have it not accessible from a matter of, let's say, the performance and learning how to ride and the ease of use, but also from a financial perspective.

And this is something over the last few years we've really taken-- made an effort in order to be able to provide a wide breadth of products that allow people accessibility into the brand. And to give you an idea, with the Ducati Scrambler, I mean, you could enter into the world of motorcycling through Ducati for under $100 a month for a reasonable monthly payment. And for a lot of people, that's a barrier. So if you make it easily accessible between the product and from a financial position, and then now it's just a matter of giving people access to the dealer network and to other people that they know in the sense of community that comes from motorcycling.

So we've seen a large group of people as returning motorcyclists. We've seen a growth in motorcycling within the world of Ducati. And we've seen our share increase as well. There are products like e-products that have interest. But I think right now, in the world of motorcycling, the technology is not yet where we would be able to have an e-motorcycle product that would be able to carry the Ducati brand.

ADAM SHAPIRO: And we should point out, you did have sales growth last year in China, up 26%, Germany up almost 7%, and in Switzerland, up almost a little bit more than 11%. Got to say thank you. Jason Chinnock, Ducati North America CEO, all the best to you. Pras, happy riding.