Ducati CEO Michael Lock
Michael Lock is not your typical CEO.

Of course, winding your way past beautiful beaches and through the hilly, golden terrain of northern California on a 1000cc motorcycle isn't exactly your typical way to get to work, either.

A native of London, Lock is the CEO of Italian motorcycle manufacturer Ducati (DMH), and his preferred mode of commuting is in the saddle of a Ducati Monster S4R S Testastretta.

TheStreet.com had a chance this week to sit down and talk with Lock about trends in the motorcycle market and the unveiling of two new Ducati designs, as well as the "House of Ducati" booth at the upcoming Cycle World International Motorcycle Show, Jan. 19-21 in New York City.

Emotional Decision

My first question for Lock concerns consumer choice: When a rider decides to purchase a motorcycle, why would he or she go to a Ducati dealer when it's possible to find an inexpensive, mass-produced Japanese motorcycle that has -- on the surface, at least -- similar specs?

His response is hard to refute. "People don't buy motorcycles for rational reasons. You can take the subway, it's probably quicker to get uptown ... and probably safer than a motorcycle. But actually, the safest thing of all would be to stay at home, and then no one has a life," Lock reasons.

It's Lock's belief that his company's motorcycles offer an emotional pull on riders, something unique to European motorcycles and Ducati in particular that competitors simply cannot match.

"It verges on the irrational. I think there's no easier way of putting it than that. It's an emotional decision rather than a practical one," Lock says.

However, he is quick to point out that Ducati, though a small company, is driven by its racing heritage, and what it gleans from that experience is brought directly to its street bikes.

Therefore, any motorcycle you buy from Ducati has a real-world, track-tested pedigree -- this is not an instance of style over substance.

Make New Bikes but Keep the Old

Lock displays obvious enthusiasm for the opportunity to introduce two new models to the wide Ducati line. The "House of Ducati" booth at the Cycle World International Motorcycle Show is an ideal forum, as it will include not only the new bikes but displays on Ducati history as well as a special guest.

The first new model is a top-of-the-line Desmosedici RR. This four-cylinder bike derives its name from Ducati's hallmark desmodromic-valve system -- and from the sixteen ( sedici) of them it contains.

Delivering 200 horsepower and 200-mile-per-hour performance, it was originally designed to race in Europe's prestigious Moto Grand Prix. The production model of the Grand Prix racer available to the public is what Lock coyly refers to as "marginally street legal."

Because this luxe motorcycle lists for $65,000, it would certainly give many buyers pause. But as Lock wryly puts it, "it sounds like a lot of money, and it is a lot of money. However, if you compared it to a quarter-of-a-million-dollar Ferrari, I think you'd find it's actually exceptionally good value for the money."

Also on tap, the radical, new Hypermotard ($10,995) is taking its first bow at the show. This blend of road racer and motocross motorcycle is an exceptionally light, nimble and narrow bike, as suited to agile moves in city traffic as it is to winding through back roads.

And the special guest?

To view Sean Driscoll's video take of today's Top 1% segment, click here.

Along with the two new Ducatis, Lock will be unveiling a custom motorcycle nicknamed "New Blue," which was built in conjunction with Bologna-based racing house NCR.

The bike commemorates the 30th anniversary of Ducati racer Cook Neilson's win at the Daytona speedway in 1977 on his Ducati 750SS, which he called "Old Blue."

NCR took a Ducati Sport 1000S and transformed it with lightweight, high-performance metals, removing 84 pounds of dry weight while adding 30 horsepower to the bike. The stunning result is a unique, modern version of a race classic.

From Concept to Showroom

According to Lock, the development of a brand-new motorcycle such as the Hypermotard is about a four-year process, "from the initial sketches on paper through the CAD/CAM design through the testing, the homologation official approval and ... the final production performance testing."

He notes this process is getting faster.

Ducati has joined the likes of other high-end manufacturing firms, using computers to design and test new components for flaws in a virtual environment without ever having to build them in the real world.

This innovation can shave off six to eight months from the initial design process, thus getting the motorcycle to the showroom floor much faster -- which, of course, is good for business.

Brand Aid

Though Ducati may be a small company compared to some of its Japanese competitors, it has dealerships in more than 35 countries, making it a truly international brand.

The reason for that kind of worldwide appeal, Lock feels, is the Ducati name, which has an allure other brands have a hard time matching.

To explain this cachet, Lock points to the very tight and clearly defined heritage of his company, the design style, engineering style and overall philosophy. For Ducati's appeal, he believes all these to be "absolutely essential."

And where is the biggest market? With 160 dealerships, 2006 was the year the U.S. became the No. 1 buyer of Ducatis worldwide, and 2007 will cement that position, according to Lock.

Notably, he reveals a healthy respect for his competitors in addition to a definite pride and zeal for the brand -- which is backed up by his extensive knowledge of Ducati's products down to the detailed technical specifications and product history.

The Desmosedici (left) and Hypermotard

Lock is also candid about potential barriers for Ducati in the U.S. and how the company will overcome them.

People view Ducatis as expensive, but Locks points out you can get a Ducati starting at $7,000.

The company is also working to break down the apprehension regarding cost of ownership and maintenance. Bikes introduced in 2007 and beyond will be 50% cheaper to service than they have been previously, due to changing components in the engine and a subsequent extended service interval.

Finally, on buyers' demographics, Lock is quick to point out his company's philosophy. Ducati, he says, is careful not to be overly exclusive or reject certain types of customers as some high-end brands might. His feeling is that if you like Ducati, then the company wants you.

"There are brands that transcend demographics, and Ducati is one of them," Locks explains. "We produce machinery that inspires people."



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