Ducati Opening Factory in Thailand

01/06/2011 @ 5:46 pm, by Jensen Beeler51 COMMENTS

Ducati Opening Factory in Thailand 2011 Ducati Superbike 848 EVO 635x423

Get ready to pour some peanut sauce on your spaghetti as Bologna Bullets destined for the Southeast Asian markets will soon be produced in Ducati’s newly planned factory in Thailand. Being called a “final assembly” plant, the move is similar to the one that Harley-Davidson undertook late last year, where the Bar & Shield brand setup an assembly plant in India in order to side-step the extremely high tariffs the country puts on foreign-made motorcycles. In addition to Harley-Davidson, Ducati will be joining the likes of Honda, Yamaha, KTM, and Brembo, all of whom have increased their presence in the Asian markets within the past year to capitalize on the growing economies of India, China, and Southeast Asia.

It comes with little surprise that Ducati’s union workforce is worried about the move, which could be a precursor for its jobs being shipped overseas. Like the grandstanding we saw from Harley-Davidson’s workforce (and certain media outlets), the move by Ducati would incorrectly be labeled as an outsourcing of Italian jobs to Thailand, as Ducati has already made it clear that the bikes produced in Thailand will only be sold in the Southeast Asian markets.

The situation currently facing companies outside of these markets is that fact that extremely high tariffs (up to 40% in some cases) prevent a meaningful number of units, produced in this case in Italy, to be sold in the Southeast Asian markets. To fix that problem, and to serve these growing markets, companies create local assembly factories that meet localization standards, and are thus not taxed so heavily. The result is cheaper prices on the bikes being sold in these countries, purely from the tax break alone, let alone expense being saved on the labor costs, which then spurs more sales in these countries (when you’re talking a price half of what it previously was, these extra sales boosts are often massive).

Going back to the union’s concerns, the only production that is being taken away from the Italian factory, is those bikes which would have originally been shipped to Southeast Asian markets. Also since Ducati’s new factory is a final assembly plant, presumably some of the manufacturing process for these countries would still remain in Italy. However considering that Ducati’s own Bologna factory is predominantly a final assembly plant itself (Ducati contracts most of its parts to other companies, and primarily only builds the frame and motor in-house), it is not clear what differentiates Thailand’s final assembly plant from the Bologna HQ (we’ve reached out to Ducati on this one, and are waiting for a response).

While the sky might not be falling as some have declared, there is at least a moderately reasonable concern for Ducati’s Italian factory workforce, as it is not impossible for Ducati to realize the advantages of building motorcycles in Thailand down the line, especially once the Italian company has established a stable and trained workforce in its final assembly plant. Of course this is an issue that will always loom over a domestic workforce that has high labor costs. Let us know in the comments if you’d buy a Ducati made in Thailand?.

Source: Omnimoto

Comment:

  1. Jules says:

    Ducati made in Thailand?!

    SACRILEGE!

    This is sad news

  2. Mark says:

    If you want to find out how to improve our economy, create jobs and rebuild the middle class, we only need to look at how the emerging markets in Asia, India and Brazil are doing it.
    It’s very simple and it works, TARIFFS!!!! Why can’t Ducati open an assembly plant in Ohio, why can’t IBM open a factory in Michigan, why can’t Levis open a factory in California????
    The simple reason is why should they when we are more than happy to purchase all their stuff anyway at no charge to them, and better yet, get tax breaks from the taxpayer for doing it.
    How long are we going to let the corporations drain every job and penny out of our economy before we all wake up.
    A fair trade and tariff system has been part of our economy for 200 years, until 1980 when someone decided that corporate profits were far more important than jobs for Americans.

  3. Bond says:

    Absolutely not. Ducati is an italian bike… otherwise i wouldn’t buy it! I’m sure that some south east asian customers would feel the same..

  4. froryde says:

    Viva Bimota!

  5. Mark says:

    Bond, I guess you hold all the Chinese products you own to the same high level of desirability as a Ducati, otherwise you wouldn’t buy them, right?

  6. Richard Gozinya says:

    Seems to be a pattern. Asian or South American country slaps high tariffs on imports, American and European companies build factories in those countries. Maybe we should return the favor, reciprocal tariffs. Any country that has tariffs on our goods, we put one on their stuff too. Though it’s not like most of these countries design anything anybody wants at present, someday they might. India’s closer to that than any of them.

    And Mark, Chinese goods aren’t desirable, they’re cheap.

  7. Random says:

    Put tariffs in other countries’ goods? Well, I say you should be better informed, your governments are already doing it one way or another.

    Huge tariffs on sugarcane ethanol, subsides to locally produced ethanol, meat and other products (even with the excuse of “preserving a lifestyle”) are common practices in many countries. There are many, many discussions of the kind in the world commerce organization (or something like that?).

    Is it desirable or should it be present in a perfect world? Hell no. Seems like it’s the real world though, usually more complicated than it seems.

    Back into bikes, as much as I’d like to ride a Ducati made by proud Italians or a genuine US HD, money, tariffs and other mundane aspects are holding me down. And even if I’d also like you to enjoy riding a 100% ethanol fueled bike (like I am) and sensing the nice smell it produces, these aspects are also involved. Sometimes it seems like when everyone is trying to win, everybody loses.

  8. jay bond says:

    eventhough ducati make in thailand, the quality is same just like italian made..
    don’t worry about the quality..
    Honda also have factory long time ago in thailand..why???
    because thai workers are very hardworking, responsible to their job…
    not like Indonesian…
    and of course because Ducati can cut their production cost by low salary to Thai workers..
    low salary but good job…

  9. Tom says:

    Mark, I will speak for myself. I live in Japan and I will ONLY buy a Chinese made product when I am forced to. When I have the option, I ALWAYS take the option even if its some other third world slave house country. Meh, if people in the US want to continue to worship at the alter of St. Ronny and his failed Trickle-Down Economics, the fall of the US Empire will not take me down with it. Perhaps, the sooner it happens the better so that the US and Europe – the places that built the modern world – can rebuild themselves from the ashes of their ideologues. It worked in Germany and Japan. Both are more powerful now than they were in the 1920s.

  10. Pete says:

    I really dont know what all the fuss is about. Most of us wear Nike or Adidas. Its made in some sweat shop in Asia. ” Made in Taiwan” adorned almost everything I wore growing up. I ride an R1, Its made in Japan. So freaking what ? If it was made in Vietnam do you think I’d give a damn ? I just returned from Thailand a few weeks ago. I’ve never come across a more hardworking nation. There’s no handouts, you work for everything.
    As soon as an investement is planned for an emerging market economy, you frown. “Why isnt it set up in California or Ohio ? Why would they ? So that you can Unionize the workforce and hold the employers to ransom everytime you’re not happy with your increase ?

  11. Mark says:

    Tom, I agree 100%. The success of any country is based on policies that promote the “general welfare” of it’s people. All these emerging countries understand that and their trade policies are an integral part in building their middle class.

    The conservative ideology of the last 30 years has slowly shifted our policies from promoting the general welfare of the people to promoting the general welfare of the corporation at the expense of the people. How much further does this country need to sink before we wake up and realize this.

    How ironic, that a country like India is setting the example of how government can best serve the interests of it’s people. We should be completely embarrassed!

    Bond, the point I was making is that you don’t seem to care that your Levis, an iconic American brand are made in Indonesia, or your GE refrigerator is made in Mexico, so why do you care if your Ducati was made in Thailand? You don’t seem to have a problem purchasing American Brands that are no longer made here, but now somehow care about the purity of an Italian product. I think if you cared as much about the purity of your own American brands, we wouldn’t be in the mess that we’re in.

  12. Other Sean says:

    Mark, don’t put words in Bond’s mouth, or anyone elses. Maybe he does have a problem purchasing American brands that are made overseas, but there’s shit little he or any of the rest of us can do about it. It’s not generally reported, like this.
    And there’s a bit of difference between a pair of Nike’s and an Italian vehicle. If that’s lost on you, stop posting on a motorcycle site and go sound smart on NPR.com or something.

  13. Neil says:

    Ducati used to be exclusive and it was even considered “rare” in some places to even see one.
    Now mass production and the almighty dollar will put an end to this trend.
    Now they will be sold everywhere and overproduced just like everything else.
    Made and sold in Thailand now? The Italians should be in an uproar over this….
    Pathetic…..

  14. Mark says:

    Sean, didn’t mean to put words in anyone’s mouth, just pointing out that the majority of us don’t care where the products we buy are made unless they’re purchased as a status symbol, then it becomes extremely important all of the sudden.

    If we cared half as much about the impact that foreign made goods effects our economy, maybe we wouldn’t be in this mess. And yes, we can do something about it, the first step is to change the attitude that we can’t.

    I agree, there’s a huge difference between a pair of Nike’s and a Ducati on the consumer level, but no difference at all on an economic level.

  15. mxs says:

    Quote:
    Mark says:
    January 7, 2011 at 8:54 AM

    Sean, didn’t mean to put words in anyone’s mouth, just pointing out that the majority of us don’t care where the products we buy are made unless they’re purchased as a status symbol, then it becomes extremely important all of the sudden.

    You just did it again …. or did you run a poll?

    The fact that people don’t have a choice often, it doesn’t mean they don’t care where a product is made (especially something as expensive as a vehicle). People do care, but often times cannot do much about it …. in another words they cannot afford it or they have no choice in product lineup ….

  16. Mark says:

    Neil, I agree with your sentiments, but there are economic realities that can’t be ignored.

    It’s going to be very interesting to see how this is going to go over with Italians. I don’t think it’s
    going to be a big deal, as long as Ducati does not try to re-import and sell those bikes in Italy or any other country. If that were to happen, I can guaranty Italian would be marching in the streets, as they should, but that wont happen. Unlike our own trade policies, Italy protects it’s workers, and won’t allow Ducati to do this anyway. In fact, this will increase Italian jobs, since an increase in sales in Thailand will require more parts to be made in Italy and shipped their.

  17. Chris says:

    I would never pay 15 to 20k for a Ducati made in Thailand just like I will not pay 50 to $100 for a pair of Nikes(I wear New Balance the model is still made in the US)What really blows is when these companies pay slave wages and still ask top dollar for their products.

  18. MikeD says:

    Hey ! It might not be a bad thing at all , maybe now a broke Schmuk like myself will be able to afford one of those 2Wheeled Frilly Italian SuperModels…LOL.

  19. You guys read the part where the bikes made in Thailand are only going to be sold in SE Asia, right?

  20. tarde says:

    I’ am going to stay in topic and not talk about the other social or economic side dribble.

    Jensen Beeler:

    If it remains as you stated, I think I will be OK with this situation (I’ am not going to lie, I selfishly would rather not see Ducati make this move).

  21. Sean in Oz says:

    Wonder if we can get Oz included in SE Asia. Ducati’s that are reasonably priced, reliable and with good fit and finish would be great. I might even buy one.

  22. donno says:

    Don’t worry,

    It’s just a way for ducati to bypass high tariffs slapped on non asian products sold in SEA. Almost all of the components are build in Italy and then “assembled” in Thailand. And sometimes “assembled” can just mean a partially knocked down bike that only needs maybe its forks, bodywork and wheels assembled, and voila!, it is declared “made in Thailand”. And since thailand is a part of the AFTA treaty, now ducati can sell bikes in Indonesia, Malaysia and Singapore too with low tariffs, and this might mean ducatis can be as cheap as an equivalent Honda or Suzuki!

  23. Tom says:

    Chris, what New Balance shoes are these? I still have family in the US who ship me things and I would like to get US made shoes if they fit.

  24. Neil says:

    I think doing this will take the overall image of the Ducati brand and bring it down.
    I thought they did the same thing letting Orange County Choppers sell Ducati as well….

  25. Mark says:

    Neil, I’m not so sure, as long as they keep making great products, win races and have high profile riders like Rossi, I think they’ll do fine.

    I don’t think trying to expand your market to increase sales is detrimental to a brand image as long as the products stay true to the brand.

  26. Jean-Paul says:

    I am trying to think of this from the perspectives of both Ducati and the prospective buyer (me). Automobile companies manufacture vehicles all over the world in order to counter tariffs and to reduce costs. I live in San Francisco, CA. The question for me is whether I’d buy a Ducati manufactured in the North America.

    To some extent the answer depends on if the manufacturing process is similar to that of the Bologna plant. My guess is that there will be a move towards volume of production – perhaps a type of manufacturing process similar to that of the Japanese companies. I’ve seen video footage of the Bologna plant as well as plants from Honda and Kawasaki. The Bologna plant is far more relaxed and there’s less pressure towards overall numbers. I doubt that this philosophy will transcend to Thailand (or anywhere else for that matter). How much influence will the Bologna plant have on the Thailand plant is what interests me.

    I know that I would not have a problem buying a BMW car manufactured in South Carolina. So, I guess I wouldn’t have a problem buying a Ducati made in North America. If I lived in SE Asia, I’d probably feel comfortable buying a Ducat made nearby.

    If they don’t maintain the feeling that when the make motorcycles, it’s a craft, not just putting together some parts, then they will lose their charm. But who’s there to replace it? Meaning what company can replace the mystique that Ducati currently has?

  27. Jaybond says:

    Maybe Aprilia could also be joining, to tap into the South East Asian sportbike market by setting up factory there. Malaysia could be the potential location.

  28. mugget says:

    I don’t get why so many people are fixated on where things are made. Personally, if Ducati bikes are still made to a high standard, if they still perform just the same and I can get it for a cheaper price – them I’m all for it. Maybe they can offer “special edition” made in Italy bikes for an extra few thousand dollars on top of the standard model, to satisfy the “made in Italy” elitists.

  29. Tom says:

    Its 2010, you have load of history book available to you, and you have the internet. However, you still do not understand why people are fixated on where things are made?!?!?!?!? Wow.

  30. mugget says:

    Exactly, you have all the internet available and yet people don’t seem to understand that you can have the exact same part manufactured in China, Thailand or anywhere else – to the identical specification and you will not even know the difference. The only difference is whose hands are making the product. So if someone really wants to pay more just so they can say “made in Italy” then that’s fine by me. But I will take the identical product produced elsewhere and gladly keep the extra cash to spend on aftermarket upgrades.

    So what is the real difference? The only difference is the words you can say. You get to say “made in Italy”. Ok then. Ducati will always be an “Italian” bike, you can’t take that away – they won’t lose their heritage so don’t worry about it! Look at the example of Apple. They proudly state “designed in California”, however their products are manufactured in Asian countries, people are still happy to pay a premium for a quality product. What if Ducati changed their marketing and products to say “designed in Italy”, what if that allowed them to include even more features and up-specced items on their bikes and expand their product lineup? Not such a bad thing for the majority of people.

    Also I’m sure you are aware, but the year is actually 2011. ;)

  31. John says:

    Honda and Yamaha do this for very long time.

  32. Got_robot says:

    In Thailand, we have plenty of outstanding and high experience in motorcycle manufacturing for years because there are a lot of manufacturers here before Ducati.

    In my opinion, we will get the identical bike out of the factory excepting the different hands as “mugget” said.

  33. Bill Smith says:

    Designed in Italy, built in America!

    Italian design meets the American workforce

    Italian style + American ingenuity = a big win for American business and motorcycle enthusiasts

    Girl (Italian) meets boy (American male motorcycle enthusiast) – Love at first site!

    Pick your headline…

    Ducati today announces a new factory in Detroit Michigan to begin assembling one of Italy’s prize gems – the Ducati motorcycle! America is Ducati’s most important growth market for sport motorcycles. Today, Ducati announces a joint venture brokered by Michigan’s Governor and Ford Motor Company (F) to begin building the Ducati sport motorcycle line as well as its “Monster” line (the best-selling Ducati model) this August.

    This unprecedented joint partnership provides a modern model for American assembly of overseas products to provide high quality Italian motorcycles in the US. BMW, Honda and Yamaha are watching closely to determine viability for assembly options in the “motor city.”

    Ford has not only committed three closed plants and substantial assembly proficiency but has committed to providing similar options to other motorcycle manufacturers abroad. Ford is also providing Human Resource personnel placement to staff the operation with committed tenured assembly veterans.

    The state of Michigan worked collectively with Ford and local municipalities to wave all corporate state and local property taxes for the first ten years of operations. State unemployment taxes will be reduced by 25% for the first 500 employees over the first two years of operation. In addition, the state will contribute 25% to the 401k employee programs for the same term!

    Embellishment at its finest? Too hard to imagine? Is this simply too creative for government agencies and the American auto corporations?

    I don’t believe so!

  34. MIKEZILLA says:

    Guys, since India and Thailand are developing countries, their Governments will do whatever to increase their economic as well as market strength and India having a large population, any company would like to invest if the country advertises itself properly, which is what I think India is doing right now.

  35. Tom says:

    Wow mugget. Seriously wow. I can see that you would not agree with someone’s views that differed than your own but to say that you don’t understand why someone would not agree with you…..that’s just wow. Try making Scotch and selling it as Scotch when you did not make it in Scotland and see ow well that goes for you while you still wonder why people care where things are made. Christ some people……

  36. mugget says:

    That’s fine is someone else wants to only drink Scotch made in Scotland.

    But if Laphroaigs wants to start making their Scotch anywhere else I’m fine with that – as long as they don’t try and make out like it’s still distilled in Islay, and as long as it tastes the same. You’re really going to get your back up about where something is manufactured when all other factors are identical? That’s the thing I don’t understand, but oh well.

  37. Tom says:

    You still don’t get it and its obvious that you don’t want to understand. That’s fine. Your ignorance is not my pet project in life to correct. I will tell you though that Scotch can only come from Scotland. Champagne can only come from that particular region of France. Kobe Beef can only come from certain ranches around Kobe that adhere to a certain process. It does matter where its made and what you try to call it. There are appellation laws and there are appellation expectations in business especially after decades of companies cultivating this appellation expectation. Try to find out some things sometime before you die. Damn.

  38. mugget says:

    Eaaasy… no need to get all worked up, I’m not trying to provoke you or anything. All I am saying is “what is the difference?” Produced to the same spec with identical parts in another country…? Honestly I can’t say what the difference would be! No one else has either…

    I was thinking of Champagne as well. I had always though that saying “French Champagne” was a bit silly, like saying a “meat steak” (as if there is any other). But the reality is that you can buy Champagne that is produced in parts of the world other than France. People still buy it… I don’t know of any great outrage that Champagne is produced outside France. I just think there’s no point trying to fight it. Globalization and all that…

    Anyways – it is what it is. Whether or not I will ever “get” why people insist on Italian made Ducati, who knows…

  39. Tom says:

    Actually, you can only buy Champagne from that region of France. Otherwise, its “Sparkling Wine.” This is my point. I fully understand your point and I’m not saying that its invalid. I’m just surprised that someone has no clue about appellation and why its so important when companies kill themselves to cultivate it.

  40. Neil says:

    Yes Mark, I understand where you are coming from……..but last I checked, Ducati has dropped the World Superbike team with the exception of a satellite squad and Pegram Racing is not racing the Duc in AMA racing anymore either. These are the bikes in my opinion they should be racing and concentrating on(848 and 1198)….Racing is the Ducati heritage… I can’t afford a Desmo that they race in MotoGp….
    Also, some of the so called Ducati dealers in my area shouldn’t be allowed to even sell the Ducati line, in my opinion…No customer service whatsoever….Seems to me Ducati just cares about how many they can sell lately vs. the overall Ducati experience, which in my opinion, used to be very good but has gotten to be very impersonable.
    Just my opinion….

  41. Tom says:

    Neil,, franchise laws make it nearly impossible for Ducati to drop a dealer. It would be much better if manufacturers could open their own dealership to sell directly to customers as this would save people money. However, the laws won’t allow it. It is possible that your frustration should be solely directed at the stealership and not Ducati as Ducati is trapped in the relationship.

  42. Brett says:

    The Americans just don’t get it do they?

  43. DFB says:

    No. Fucken. Way.

    Ducati’s are made in Italy, I dunno what the hell these things will be

  44. Buckets says:

    Buwahahahahahahahahahaha reminds me of Spaghetti Westerns… Long Live Kawasaki…

  45. Brett says:

    Hey Buckets, would it matter to you where your Kwaka was built?
    If you say no, I reckon I’d understand that, but can you appreciate why someone who knows the intangible feeling that goes with owning something that was assembled with care and pride by the hands of a craftsman would be pissed off about this?

    Beveldrive.

  46. Buckets says:

    Beveldrive… I absolutely understand Ducatista being pissed off to hell about this. As I would if the Ninja was made elsewhere…. how could it be a Ninja… but as with most things motorcycling, we always have a chuckle at each others expense… this is the way it has always been and is the way it always will be.

  47. Smokey says:

    Pfftt, perhaps the quality will actually increase. I’d back a Thai made product over an Italian one any day. Not as if Ducati is known for it’s quality, fit, finish or reliability but trading on an image, similar to HD. In this Tom has a point, if image is your main strength then you make a move to tarnish it in the eyes of your custoemr base, wtf? The fact the product will be the same is a logical point, but logic has little to do with buying a Ducati. If these customers had an ounce of logic they’d be riding S1000RR’s !

  48. Brett says:

    Sorry Buckets, had a momentary lapse of humour there, but by the time I’d walked out to the shed to grab my third stubbie I was smirking. Spaghettti Western?……too right ya cheeky bugger.

    Surely you’re taking the piss too Smokey? (If you’re not I’d be happy to explain myself further).

    Beveldrive.

  49. Buckets says:

    Beveldrive, Smokey is on the products again… bloody drug dealers… mind you, the S1000RR is a magnificent machine…

  50. Brett says:

    Yep, if I was ever going to own a Beemer,and I’m not joking here, it would be an S1000RR.
    Imagine this though, Teuton v Taiwan…..c’mon!

  51. Tom says:

    Brett, Kawasaki does not market where its made as being primarily important. Why don’t people grasp this? The Italians market EVERYTHING that they make as being special. They imbue a soul with style into everything that others cannot. An Armani suit is inherently better than one from a 65 year old custom tailer in Hong Kong because the ITalian suit was crafted by Italian hands. Appellation matters when a company, like Ducati, spends decades cultivating the idea, whether true or not, that their bikes made in Italy are better in every way than bikes made elsewhere.

    Lets see Ferrari make cars in Thailand. Imagine the hell that would ensue from such an announcement?!?!? Now, imagine if Volkswagon were to do so. Zzzzzzzzz.