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Old 27th April 2017, 15:28   #1
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Default Rumour: Volkswagen considering sale of its Ducati brand

According to few media reports, Volkswagen is considering to sell its Italian motorcycle brand - Ducati. This probable sale is being claimed to be a part of the German automotive group's plans to cut down its operational costs and streamline its portfolio as it embarks on a brand overhaul strategy post the infamous dieselgate emissions scandal.

VW's luxury car vertical - Audi had acquired Ducati in 2012 for around 860 million Euros. Sources suggest that the bike maker can currently be valued at around 1.5 billion Euros, which is 15 times its annual earnings of the last year. VW is currently said to be scouting the market for interested potential buyers of the Ducati brand. If the automaker doesn't manage to receive satisfactory response or valuation for its motorcycle brand, it might also consider a stock market flotation for Ducati in order to raise some money.

Volkswagen will be spending heavily on alternate energy and new mobility technologies in the next few years, as it is aiming to redefine its brand image that got tarnished with the dieselgate emissions scandal. To fund this major brand reformation, the automotive group has been cutting costs across its brand portfolio. This includes cutting several jobs at its passenger car business, VW quitting the World Rally Championship and Audi exiting the World Endurance Championship, including the coveted 24 Hours of Le Mans. The sale of the Ducati brand might also be VW's approach of establishing enough liquid capital and bandwidth to fund its multi-billion dollar shift towards renewable energy.

Source: Reuters
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Old 27th April 2017, 16:54   #2
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

Heard from a reliable little birdie that (our very own) Hero might be interested in acquiring it.

Also, I don't think it's a rumour. They are mulling a sale and have roped in Evercore to advise them.

Last edited by mango_pal : 27th April 2017 at 16:57.
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Old 28th April 2017, 12:59   #3
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Default Re: Ducati on the block! EDIT : Audi buys Ducati for USD 1.12 Billion

Ducati seems to be on block again. VW is planning to sell ducati for an estimated value of $1.5 billion after buying it 5 years back. According to rumours/sources, VW wants to streamline operations to fund a post Dieselgate strategic overhaul.

Quoting from multiple sources :

1. Rushlane
Quote:
Volkswagen, faced with a need to settling an estimated €16.2 billion in fines and expenses as a result of its emission cheating scandal could be considering selling some of its brands that include Ducati, Scania and MAN. This will allow the company to recover some of its losses and get the company back on track.
2. Livemint

Quote:
Volkswagen (VW) is reigning in spending across all areas of group-wide operations including by cutting thousands of jobs at its core passenger-car brand to fund a multi-billion-euro shift to embrace electric cars and new mobility services.

VW has tasked investment banking boutique Evercore with evaluating possible options including a sale of the thoroughbred brand, which its luxury division Audi acquired for about €860 million ($935 million) in 2012, the people quoted above said.
3. Motorbeam

Quote:
Along with Hero and other Chinese companies, Ducati might even appeal to investors such as the consortium that bought Aston Martin in 2007. However, it remained ambiguous whether brands such as Honda, Polaris, Suzuki, Harley-Davidson were interested or not.

According to Audi’s annual report, Ducati posted sales of €593 million in 2016. However, if Volkswagen does not attract enough interest, it might list Ducati on the stock market as well as in go public.
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Old 28th April 2017, 14:43   #4
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Default Re: Ducati on the block! EDIT : Audi buys Ducati for USD 1.12 Billion

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Originally Posted by TorqueyTechie View Post
Ducati seems to be on block again. VW is planning to sell ducati for an estimated value of $1.5 billion after buying it 5 years back.
$1.5 billion is pocket change for VW, even after Dieselgate. IMHO, Ducati is a fantastic brand and VW shouldn't sell it. The only limitation would be management bandwidth as VW is primarily a car company, and doesn't understand bikes too well?

Here's an out of the box idea. How about if Mahindra does a Tata-JLR and buys Ducati? Mahindra has been desperate to get its foot into the 2-wheeler door. Adopt the Tata-JLR approach and let Ducati do its own thing, with Mahindra only offering strategic advice as and when needed. Ducati sales have been growing year on year for 7 straight years; last year was their best ever. The brand certainly has a good future.
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Old 28th April 2017, 15:11   #5
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Default Re: Ducati on the block! EDIT : Audi buys Ducati for USD 1.12 Billion

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Here's an out of the box idea. How about if Mahindra does a Tata-JLR and buys Ducati?
A really good suggestion. Hope the bigwigs at M&M are looking at this development closely.

Only one thing though, M&M have already purchased Peugeot two wheelers already, and are yet to see some return on their investment. From a business perspective, it would be wise to hold on to some cash looking ahead into the future (LeShi / LeEco is a classic example).

Sad to see a great aspirational brand (I always dream of riding a monster in an open road) despite doing really well is being put up for sale. Like you had mentioned, who ever gets the brand would be very happy, as the results of the efforts made by the group in increasing the sales have worked wonders.

Whoever buys them, just let them do what they are doing and strategically bring smaller displacement bikes (a la BMW GS310) were the market is expanding more than the other segments.
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Old 8th May 2017, 08:48   #6
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Default Royal Enfield revving up to buy Ducati?

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NEW DELHI: It's arguably the most iconic brand among high-performance motorcycles. And it could soon be owned by an Indian company. Royal Enfield is understood to have been approached to acquire Italian superbike maker Ducati, owned by Germany's embattled Volkswagen group.
http://economictimes.indiatimes.com/...w/58568573.cms
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Old 8th May 2017, 13:22   #7
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

I think RE should not buy out the Ducati brand. Yes they have several decades of experience manufacturing motorcycles but still they have a very long way to go in terms of creating or nurturing a global brand. With Ducati , people will have very high expectation with respect to technology and general reliability which I doubt RE will be able to sustain.
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Old 8th May 2017, 13:38   #8
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Default Re: Ducati on the block! EDIT : Audi buys Ducati for USD 1.12 Billion

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Originally Posted by GTO View Post
...... The only limitation would be management bandwidth as VW is primarily a car company, and doesn't understand bikes too well?
.
But, if BMW and Honda can make and sell both cars and bikes successfully then why can't VW? Could it be they are giving up early and focusing more on cars post dieselgate?
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Old 8th May 2017, 16:42   #9
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

I know Ducati is completely into sports bikes and Royal Enfields are on an entirely different area of the field - selling bikes with heritage.

But going by how J-LR has blossomed under Tata, and how Volvo is being more successful under a relatively unknown Chinese car maker Geely, I think this deal can strike gold too.
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Old 8th May 2017, 16:49   #10
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

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Originally Posted by darklord View Post
Quote:
Originally Posted by aravind.anand View Post
I know Ducati is completely into sports bikes and Royal Enfields are on an entirely different area of the field - selling bikes with heritage.

But going by how J-LR has blossomed under Tata, and how Volvo is being more successful under a relatively unknown Chinese car maker Geely, I think this deal can strike gold too.
Well if RE has that much money to spare or they can raise that much capital, they should first spend it on getting the quality issues of their old , new and upcoming bikes and then maybe look at plunging into a buyout.
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Old 8th May 2017, 17:11   #11
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

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Originally Posted by vikrantj View Post
Well if RE has that much money to spare or they can raise that much capital, they should first spend it on getting the quality issues of their old , new and upcoming bikes and then maybe look at plunging into a buyout.
I guess when we say Royal Enfield, its Eicher group thats making the move. I don't think they would think on those lines. I mean, while REs problems are real, and they need to sort it out for themselves. Not sure if that would come in the way of an expansion plan of the parent company. Plus, the Ducati R&D can surely help RE just the way JLR is helping out TAMO silently.
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Old 8th May 2017, 20:23   #12
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

Probably the Eicher group has flush funds and capital/strategic capabilities which it could use to buy out and probably run Ducati successfuly from a management POV, but we just cant bring Royal Enfield into the picture as I dont see the RE brand giving anything to Ducati nor Ducati technology coming into RE.

I have always found RE has a very strange outlook to its business. While Sid Lal has taken the company to new heights with all the marketing, brand stores, Rider Mania etc (and to some extend with the Himalayan- which I consider a great Indian effort. Full stop), the heart of all this, the classic RE bike has still remained 'a vintage bike (behaving kabhi ha, kabhi na) for which parts and service is still readily available' nothing more nothing less. Unlike the old Harleys, Ducatis, Triumphs etc which had notorious reputation for bad quality, frequent break downs, oil leaks etc, they all went back and found their permanent fixes and today churn out very good products in their respective segments, while RE has still managed to churn out the same bikes with a few improvements here & there, but not translated those financial resources into re-discovering and re-inventing a world class, highly reliable product. Rather they continue to make guns, sorry motorcycles! So I am not sure if they acquire Ducati, in what way the RE bikes are going to benefit. Lets see

Last edited by Haroon : 8th May 2017 at 20:28.
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Old 9th May 2017, 02:12   #13
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Default Re: Rumour: Volkswagen considering sale of its Ducati brand

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Originally Posted by GTO View Post
$1.5 billion is pocket change for VW, even after Dieselgate. IMHO, Ducati is a fantastic brand and VW shouldn't sell it. The only limitation would be management bandwidth as VW is primarily a car company, and doesn't understand bikes too well?

Here's an out of the box idea. How about if Mahindra does a Tata-JLR and buys Ducati? Mahindra has been desperate to get its foot into the 2-wheeler door. Adopt the Tata-JLR approach and let Ducati do its own thing, with Mahindra only offering strategic advice as and when needed. Ducati sales have been growing year on year for 7 straight years; last year was their best ever. The brand certainly has a good future.
Great idea! I hope some bhpians here do give this idea to Mr Anand Mahindra.

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Originally Posted by pgsagar View Post
But, if BMW and Honda can make and sell both cars and bikes successfully then why can't VW? Could it be they are giving up early and focusing more on cars post dieselgate?
I believe the acquisition timings and the boardroom drama at the VW family could be too much for VW currently and the dieselgate doesnt help.

Quote:
Originally Posted by aravind.anand View Post
I know Ducati is completely into sports bikes and Royal Enfields are on an entirely different area of the field - selling bikes with heritage.

But going by how J-LR has blossomed under Tata, and how Volvo is being more successful under a relatively unknown Chinese car maker Geely, I think this deal can strike gold too.
Ducati gives a red carpet entry for RE to the US market. But do note they cannot just pick a bike from india and try selling it here. Freeways here have a average speed limit of 65mph which is 104kph which is the upper spectrum of uncomfortable for any RE motorcycle. Also ducati themself are not known for their great reliability. Could end up going the negative way too if acquired.

Quote:
Originally Posted by anand.shankar View Post
I guess when we say Royal Enfield, its Eicher group thats making the move. I don't think they would think on those lines. I mean, while REs problems are real, and they need to sort it out for themselves. Not sure if that would come in the way of an expansion plan of the parent company. Plus, the Ducati R&D can surely help RE just the way JLR is helping out TAMO silently.
Plus one on this.

Quote:
Originally Posted by Haroon View Post
Probably the Eicher group has flush funds and capital/strategic capabilities which it could use to buy out and probably run Ducati successfuly from a management POV, but we just cant bring Royal Enfield into the picture as I dont see the RE brand giving anything to Ducati nor Ducati technology coming into RE.

I have always found RE has a very strange outlook to its business. While Sid Lal has taken the company to new heights with all the marketing, brand stores, Rider Mania etc (and to some extend with the Himalayan- which I consider a great Indian effort. Full stop), the heart of all this, the classic RE bike has still remained 'a vintage bike (behaving kabhi ha, kabhi na) for which parts and service is still readily available' nothing more nothing less. Unlike the old Harleys, Ducatis, Triumphs etc which had notorious reputation for bad quality, frequent break downs, oil leaks etc, they all went back and found their permanent fixes and today churn out very good products in their respective segments, while RE has still managed to churn out the same bikes with a few improvements here & there, but not translated those financial resources into re-discovering and re-inventing a world class, highly reliable product. Rather they continue to make guns, sorry motorcycles! So I am not sure if they acquire Ducati, in what way the RE bikes are going to benefit. Lets see
True, my similar sentiment. RE also sells more bikes a month. They may be taking more than they can chew if they purchase this. RE is a very aspirational brand, ducati does cater as a luxury item.

Lastly i do think, a person with really deep pockets and willingness to throw more money into this hole would only jump at this opportunity. As it gives you a medal of ownership, but also a huge expectation on your shoulder when you do own the same.

Maddy
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Old 9th May 2017, 08:05   #14
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Default Re: Ducati on the block! EDIT : Audi buys Ducati for USD 1.12 Billion

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Here's an out of the box idea. How about if Mahindra does a Tata-JLR and buys Ducati?
They might but I dread to think with their naming conventions, that they rename Ducati to Ducato!
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Old 23rd May 2017, 22:13   #15
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Bajaj also seems to be interested..

http://businessworld.in/article/Is-B...5-2017-118093/

With KTM experience.. it seems to be the best suitor in my opinion

Last edited by payeng : 23rd May 2017 at 22:14.
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