By on April 26, 2017

[Image: Audi AG]

After history’s largest and most expensive automotive scandal forced a sudden pivot at Volkswagen Group — from expansion-minded to profit-focused — the German automaker might let go of a cherished toy.

According to insider sources who spoke to Reuters, VW is exploring the sale of Italian motorcycle manufacturer Ducati as part of a company-wide streamlining effort. After shoveling over $20 billion to the United States in a bid to end its diesel debacle, the company is in full penny-pinching mode.

The revered boutique motorcycle company was a long-awaited feather in ex-VW chairman Ferdinand Piëch’s hat, but after just five years of ownership, it may be time for Ducati to find a new home.

Two sources claim VW has hired investment banking firm Evercore to look at money-saving options, including a Ducati sell-off. This shouldn’t come as a major shock. One year ago, the company admitted in its annual earnings report that unexpected expenses could lead to a sell-off of one or more of its many holdings. (The brief mention was subsequently downplayed by VW’s chief financial officer.)

While no decision has been made on the divestment, VW has already reached out in search of potential buyers, the sources claim.

Volkswagen Group’s Audi brand purchased Ducati for just under $1 billion in 2012, 18 years after Piëch, a motorcycle enthusiast, passed on an earlier chance. Ducati began manufacturing its own motorcycles in 1950 after first selling small engines for bicycle conversions. The company was founded in 1926 as a radio component manufacturer.

In recent decades, Ducati became something of a foster child. After being sold to Italian motorcycle manufacturer Cagiva in 1985, the brand fell under the control of private equity firm TPG Capital in the late 1990s. The following decade, it changed hands again, this time to Investindustrial Holdings.

Both VW and Audi refused to comment on the report. Should the company decide to let the storied brand go, it could prove a lucrative move — one of the sources estimates Ducati’s value at 1.5 billion euros ($1.63 billion), 15 times what the sportbike builder earns every year.

[Image: Audi AG]

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26 Comments on “Cash-strapped Volkswagen Thinking of Dropping Ducati: Report...”


  • avatar
    RHD

    One international bank transfer to Stuttgart of eleven billion two hundred sixty-five million Chinese Yuan Renmimbi, and Ducati will belong to SAIC or Great Wall or whoever the Party decides should own it.

  • avatar
    SCE to AUX

    I’m not a motorcycle guy, but Ducati should be owned by another motorcycle company as a way of filling out the new owner’s product line. Then they should be left alone to do their thing, without much meddling.

    BTW, isn’t selling a $1.6 billion asset sort of scraping the bottom of the barrel? There must be other reasons Ducati would be considered for disposal.

    OTOH, GM just sold Opel for a measly $2 billion, only to dump $3 billion into its cash-poor pension fund.

  • avatar
    Lou_BC

    Ducati entered the “power cruiser” market with the Diavel. They now have a more cruiser-centric model. The Diavel has turned into their best seller IIRC. They have also tapped into the Adventure bike market with the MultiStrada which is also selling very well. The Ducati Monster which is a naked bike i.e. no fairing is also a good seller. They are known for World SuperBike and very sexy sport bikes but that aspect of the business has been eclipsed by the models I have mentioned.
    I personally would love a Diavel but not the cruiser styled “X”. 162hp* and 96lb-ft of torque is amazing for it’s class and nothing out there sonds as sweet as a desmo V-Twin. The old Yamaha V-Max is about the only bike out their that probably sounds as nasty.

    • 0 avatar
      OldManPants

      “nothing out there sounds as sweet as a desmo V-Twin”

      Even I was transfixed when I once chanced by a frat boy winding up a 916 to impress some buddies. Must have just gotten it.

      The godly roar was evocative of being close to a big radial Warbird firing up at Oshkosh.

    • 0 avatar
      Andy

      The Aprilia V-twin is a nasty sounding Italian beast too. I’m on my second. 2007 Tuono.

    • 0 avatar
      hubcap

      I think the Scrambler is Ducati’s best seller by a long shot. It helps that it’s significantly less expensive than many of their other bikes and it’s something that appeals to new and experienced riders.

      Regarding exhaust notes… the current V-4 in the Aprilia RSV-4 and Tuono has got to be one of the most visceral and soul stirring.

  • avatar
    JimZ

    “one of the sources estimates Ducati’s value at 1.5 billion euros ($1.63 billion), 15 times what the sportbike builder earns every year.”

    gotta love corporate valuations.

    • 0 avatar
      DenverMike

      “…gotta love corporate valuations.”

      Why do I smell another scandal? The buying-up of failing brands is a tax-dodge of sorts to begin with. And VW has shown they’re the most gangster of auto brand/groups.

      Ten or so marques and “cash strapped”?

      • 0 avatar
        th009

        $40B in cash and marketable securities isn’t quite cash-strapped in most people’s books. Steph is using some creative licence in the description.

        • 0 avatar
          DenverMike

          $40B for 10 marques? Except for platform/engine/tech sharing between and within brands, what does that leave? How many are outdated? Are Dieselgate payouts complete/settled and accounted for? Or is that for the end of year “profits/loss”?

    • 0 avatar
      th009

      Basically the valuation is just a multiple of annual profits. Much like the P/E ratio.

  • avatar
    Tstag

    I wouldn’t be surprised to see Triumph motorbikes buy them. Triumph are already one of Europes biggest bike makers. Ducati would give them a top end brand.

    • 0 avatar
      Syke

      Highly doubtful. Triumph is doing quite well on its own, and one of their secrets of success over the past decade and a half has been to not overextend itself, to the point of probably being the cheapest bastards in the motorcycle industry.

      A few examples: From what I’ve been told (haven’t attended since 2008), they haven’t had a presence at Daytona Bike Week in the past few years, while all the other manufacturers are set up with demo rides and displays. This from the company that introduced the “test ride our bikes” concept back in 1995. Also, having finally won the Daytona 200 three years ago (first time since 1968), they promptly scrapped the factory racing support. After all, they won, why bother spending any other money?

      This kind of corporate attitude definitely does not mesh with Ducati’s, and would be disastrous for Ducati. Ducati is like Ferrari, you’re not just buying a very overpriced vehicle, but you’re also buying into the factory racing mystique and history – you’re buying into the racing team. What Ducati spends between MotoGP and World Superbike would give the management of Triumph apoplexy.

      And if Ducati stopped or cut back racing? Good bye rationale for the marque’s existence.

    • 0 avatar
      tylermattikow

      I had a modern Triumph a few years ago. Great bikes. Currently ride a Ducati Sport 1000 Biposta. I don’t think Triumph would buy Ducati, they just don’t have the money, Ducati has a few times the profit with similar revenue and sales. Acquisitions don’t fit in the John Bloor corporate culture either. Frankly Ducati will be either an ego play for another car company (Mercedes maybe), maybe KTM if they can afford it, or a private equity firm.

  • avatar
    Caboose

    Today: VW Spins Off Storied Bike-Maker Ducati, Cries In Its Bier.
    Tomorrow: Sergio sells FCA to Ducati, Drops Mic.

  • avatar
    markf

    Part of the drain is the enormous amount of $$ Ducati/Audi spends on Moto GP. When Audi bought Ducati they promised a lot of cash towards Moto GP racing as Ducati had not been competitive since Casey Stoner left the team after 2010 season (he won the Championship in 2007) Then they signed Valentino Rossi for a zillion dollars and basically have been throwing lots of money into their Moto GP race effort. Seems Audi grew tired of the amount of money spent on racing.

    Makes sense since their retail bike business is on fire. Ducati is the Apple of the motorcycle world. Whatever they slap their name on they sell (and for a premium price) Its a shame they keep pissing away profits on Moto GP…

    • 0 avatar
      Syke

      Seems Audi grew tired of the amount of money UNSUCCESSFULLY spent on racing.

      Audi has no problem with spending money on racing, when the results are commensurate. See 24 Hours of LeMans.

  • avatar
    bikegoesbaa

    Bah to Ducati. Was fixing to buy a Hypermotard before I learned they use un-warranted timing belts because “tradition”.

    • 0 avatar
      Syke

      And if you’re going to be so monetarily nit-picky as complaining that the timing belts aren’t covered under warranty, you don’t want a Ducati. Trust me. Owning one of those is like owning a Ferrari – both to the good and the bad.

      Get yourself a Honda. You’ll be more comfortable with it.

      • 0 avatar
        bikegoesbaa

        My concern isn’t the cost of the belts, it’s that Ducati uses belts that impose significant drawbacks and no benefits for no reason other than “that’s how we’ve always done it”. If I’m missing something and belts have something to offer the rider then please let me know what it is.

        I don’t expect them to replace wear items under warranty, but my local Duc dealer said that if the (properly serviced) timing belt fails they don’t cover the ensuing engine damage under warranty.

        I really liked the Ducatis, as they made the Triumphs and Japanese bikes in the same showroom look like they were literally made out of garbage.

        I did wind up going for a Kawasaki instead. It’s significantly less pretty, but still a hoot to ride. It also requires no special attention to work right, and if the timing chain goes boom they buy me a new engine.

        • 0 avatar
          tylermattikow

          In the late 2000’s Ducati vastly increased service intervals in response to these concerns. The Desmo and belt service is at 7500 miles, which is a pretty long time for a bike considering how little most are ridden. I believe the interval used to be 4500… For the record my bike only had one issue, a faulty immobilizer when it was nearly new. It now has 6500 miles and it is 8 years old with no other problems.

  • avatar
    markf

    Yeah, timing belt and Desmo valves “Tradition” Ducati is a lifestyle brand, like every guy on a Harley every Ducati rider has branded clothing on when they ride. But they can’t make enough of them.

    I’ll stick with Aprilia, Italian bikes, reliable and much less than Ducati. Just hard to find dealers and get proper service…..


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