Volkswagen Considering Possible Sale Of Ducati

Italian motorcycle brand Ducati may have new owners soon if Volkswagen goes ahead with a possible plan of selling the brand. According to Reuters, sources familiar with the German automaker's plans have revealed that VW has roped in investment banking firm Evercore to evaluate possible options to streamline operations to help fund a strategic overhaul, following the emissions scandal. VW has reportedly started reaching out to potential buyers for Ducati, including Hero MotoCorp and a few China-based companies. VW-owned Audi acquired Ducati for around 860 million Euros (over Rs 6,000 crore) in 2012.

(2017 Ducati 1299 Superleggera)

So far, there has been no confirmation from either Ducati or Volkswagen on the report. But we expect some kind of statement from Ducati headquarters later in the day on the news. In 2016, Ducati posted sales of 593 million Euros in 2016 (over Rs 4,000 crore), selling over 55,000 motorcycles worldwide. Every year, Ducati's earnings for VW are estimated to be around 100 million Euros (nearly Rs 700 crore). Ducati's valuation in the market could be 15 times its core earnings, of up to 1.5 billion Euros (over Rs 10,000 crore).

(Ducati 959 Panigale with Akrapovic Exhaust)

Volkswagen is cutting expenditure across the group, including cutting thousands of jobs at its core passenger car brand to help pay for a multi-billion Euro shift to develop electric vehicles and new mobility services. There is no confirmation on the possible sale of Ducati yet, and this is not the first time reports of VW selling Ducati have surfaced. What is pertinent is that VW may have retained Evercore to find the current market value of Ducati. Reuters also says that another possible consideration is to offer Ducati on a public stock exchange, to raise funds.

Earlier this month, Volkswagen was slapped with a sentence in the US to pay a $ 2.8 billion fine (2.5 billion Euros) as a result of the diesel emissions scandal, which involved certain diesel vehicles equipped with software to cheat through emissions regulations. Once those vehicles were sold, the cars would pollute in excess of legal limits. Volkswagen has agreed to spend about 2.2 billion Euros (Rs 15,000 crore) compensating owners of over-polluting cars as well as spending on environmental remediation and to increase steps to develop electric vehicles. If the Ducati sale does go through, the funds may be used in those efforts.