Volkswagen Group May Sell Off Ducati Brand: Reuters Report
Yes, the revered Italian bike manufacturer is a part of the VW Group. But not for long, as Volkswagen is seriously considering the idea of selling it off to stay afloat.
Volkswagen hasn’t been having the best of times, of late. The Dieselgate emissions scandal almost choked it to death. The repercussions of the expensive settlement which had to be made to large number of customers along with the steep decline in integrity and brand value has made things extremely difficult for the German firm.
To survive the storm, VW took the cost-cutting route which in turn will keep their cash reserves stable. The initiative has been spoken of as a kind of re-alignment which saw the company cutting jobs, trimming down production, revising their portfolio, limiting or closing down their motorsports wings and focusing on electric cars. If we go by a recent Reuters report, they are also planning to sell off the Ducati brand which is currently under their umbrella.
So while it may be unusually hard to process the truth that Ducati has been a part of the VW Group, allow us to clean up that clutter. Ducati was acquired by Lamborghini in 2012 and Lambo comes under the Audi banner, which in turn is a part of the Volkswagen Group. Problemo solved!
Selling off Ducati is the industry equivalent of killing the goose that lays the golden egg.
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Ducati was more of a “trophy for the room” for then then-chairman of VW, Ferdinand Piëch, who was a motorcycle enthusiast and wanted Ducati to be under Volkswagen’s roof. It wasn’t referred to as a sensible investment then. But the iconic Italian brand which was purchased for $935 million in 2012 is one of the most profitable marques in the VW family now, with a current value of $1.6 million.
While killing (or selling in milder terms) off a goose that lays golden eggs may come across as a thoughtless move, it goes on to elucidate Volkswagen’s desperation to endure their current financial crisis. The manufacturer appears to be in dire need of cash and the cash-crunch is outweighing the need to retain their ex-chairman’s trophy. Even the long game of having a rock star brand like Ducati which made $593 million in 2016, under their belt has been ignored in favor of quick cash.
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Though the company hasn’t made an official statement yet, Reuters sources have mentioned that the group has started contacting potential buyers to discuss the possibility of a sale. We’ll keep an eye on this topic.
Source: Reuters