Reuters Frankfurt has reported that “motorbike brand Ducati could be merged with a rival or enter an alliance given a lack of synergy potential with the passenger car businesses at VW”, according to parent company Volkswagen’s Chief Executive Herbert Diess in an interview with German daily newspaper Handelsblatt.
Commenting on Diess’ remarks, Reuters went on to say that “Volkswagen has struggled to find a long-term solution for the motorbike brand amid internal power struggles, with a 1.5 billion euro ($1.8 billion) auction that stalled last year amid resistance from German trade unions”.
“I can imagine a combination or a partnership with other brands,” continued Diess. “Ducati as a motorbike icon business [on its own] within the Volkswagen Group is not sufficient.” Diess took over as chief executive at Volkswagen in April 2018. Volkswagen parent company VAG bought Ducati in 2012 for around 800m euro, plus taking on some 165m euro of liabilities.
At the time it was thought that the acquisition was a “vanity project” by then VAG chairman Ferdinand Piech, who had regretted not buying Ducati when the Italian government had put it up for sale in 1984.
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Piech, 78, was forced to resign from the business he effectively led for 20 years in 2015 in the wake of the diesel emissions software tampering scandal. A self-proclaimed 'Ducatista', he is the grandson of Ferdinand Porsche, the designer of the original Nazi era Volkswagen Beetle.
The attempt to divest itself of Ducati in 2017 ended in frustration despite advisor Evercore having successfully garnered bids that met VAG’s 1.5bn euro valuation. While reports that Harley-Davidson was bidding turned out to be inaccurate, motorcycle industry and investor led bids were received. At various stages interested parties had included the Italian Benetton family and India’s giant Bajaj Auto (a major stake holder in KTM/Husqvarna who is currently engaged in a non-equity project to bring middleweight Triumph models to market, Bajaj were known to be sat on a $1 bn cash reserve at the time).
The powerful German unions account for half of the seats on VAG’s advisory board and were united in opposition to a sale process that is reputed to have even seen Royal Enfield owner Eicher Motors increasing their initial par bid of 1.5bn euro to some 2bn.
