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-   -   Rumour: Volkswagen considering sale of its Ducati brand (https://www.team-bhp.com/forum/superbikes-imports/186445-rumour-volkswagen-considering-sale-its-ducati-brand.html)

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

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.

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
2. Livemint

3. Motorbeam

$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.

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.

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.

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 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.

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.

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

Great idea! I hope some bhpians here do give this idea to Mr Anand Mahindra.

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.

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.

Plus one on this.

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

They might but I dread to think with their naming conventions, that they rename Ducati to Ducato!

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