Piech’s desire to acquire Ducati seen as major reason for Audi’s plan

Article by Anita Panait, on March 15, 2012

Although Volkswagen Group CEO Martin Winterkorn has said that the company has no plans to offer motorcycles, he may take back his words soon when the carmaker’s subsidiary, Audi, acquires Italian motorcycle manufacturer Ducati, as suggested in reports. There is a chance that Audi may acquire Ducati. Here are some of them: 1) It is the wish of VW Chairman Ferdinand Piech, whose words are considered as a command in the company.

Piech has expressed regrets after missing out on the chance to acquire Ducati "for peanuts" in the past. With another chance at sight, 74-year-old Piech is hell-bent to add Ducati among his collection of brands. 2) There is an ongoing rivalry with the top three premium carmakers in the world – Audi, BMW and Mercedes-Benz -- all of them incidentally based in Germany. Audi’s success is partly thanks to its unabashed copycat approach, making similar moves as BMW, the world’s number one premium automaker.

BMW now has a successful motorcycle division; Audi is expected to follow suit. By acquiring Ducati, BMW could thwart any plans by Mercedes-Benz to take a crack at the Italian motorcycle maker. 3) The European Union has set a limit for carbon dioxide emissions at 95g/km. Carmakers that keep motorcycle divisions like BMW, Honda, Suzuki are hoping they could consolidate these low-CO2 emitting motorcycles into their fleet totals to make it easier to reach EU’s CO2 targe, says Autonewst. 4) BMW could take advantage of Ducati dynamic image as a strong brand; giving the carmaker an image boost. 5)  If Audi acquires Ducati, the VW Group could add motorcycle powertrains to its current engine portfolio.  VW currently builds engines for almost any vehicle like trucks and minicars. If Audi acquires Ducati, VW would have a chance to gain expertise on fuel-efficient motorcycles.

This would also create an opportunity for VW to gain more knowledge on how to make vehicles lightweight. However, there appears to be some downside if Audi acquires Ducati. 1) By adding motorcycles to its portfolio of products, VW would have a very complex line. 2) Acquiring Ducati might prove to be very costly for Audi.

Reports say that Audi has to shell out EUR850 million to acquire Ducati. If Audi acquires Ducati, the former also has to take over the latter’s ballooning debt, pegged at between EUR200 million to EUR800 million. Commenting on the reports, Winterkorn said that "one should never say no if an interesting opportunity arises,” noting that VW is big enough to acquire Ducati. Although VW may take a cost hit by acquiring Ducati, Piech is too determined to acquire the motorcycle maker. He already had acquired a number of profit-taking carmakers, with the exception of Seat. Audi may announce in April a final agreement to acquire Ducati.

Topics: audi, ducati

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