The Italian press is one of those entities that you have to both love and hate at the same time. Rumors are swirling today in Italy about a possible merger between Ducati and Piaggio that is being investigated by strategy consulting firm McKinsey & Co. According to reports, the goal of such a merger would be to create one large Italian motorcycle manufacturer capable of competing with the Japanese Four. However like all good gossip, you have to consider the source and run things past the smell test, and this rumor smells like something fanciful made up by the Italian media.
This wouldn’t be the first time a rumor like this was started by the Italian press, where just a few weeks ago there was chatter of an Asian investor about to pump money in to Piaggio. That rumored, denied by Piaggio brass just like this rumor, proved to be false.
Looking at the details of the speculation at hand, it is said that McKinsey is only looking at the merger proposition from a preliminary perspective, which could mean just about anything and include a Jr. consultant shouting out the idea in a fit of tourettes during a conference call.
You can tell when the Italian press has gotten ahead of themselves when theories center around competing with the Japanese Four. It should be painfully clear by now that the Italian manufacturers have no intention of competing head-to-head with the Japanese. Both Piaggio and Ducati have carved out a lucrative niches by swimming upstream in the market from the Japanese manufacturers, a move that not only saw them escape the recession with significantly smaller percentage losses in revenue, but also during the same time period they launched major products and product line extensions.
Instead of making a strong business case for the merger, the Italian press seems to be focusing on Italian pride rather than anything else, another sure sign of wishful thinking on a someone’s part in the mail room. After all, it’s hard to imagine how these two companies would even function together under one roof. Would Ducati replace Aprilia or would they remain standalone brands that still compete head-to-head with each other? Nothing about this situation makes logical sense.
The cornerstone of good business is keeping an eye on one’s competitors and considering all situations and possibilities, which could at least serve for a basis of these early reports; however we’re filing this rumor under not going to happen.