A recent report from The Financial Times indicates that Volkswagen’s current financial situation is serious. In fact, it’s so bad that reports say the German giant may be encouraged to sell many of its more profitable nameplates, including Ducati.
The news comes after the brand announced the sale of its marine engine brand, Everlens, for €10 billion, with CEO Oliver Bloom saying he plans to cut 100,000 staff out of his total of 625,000 at the company. Nevertheless, it is the relative success of Everlens sales, as well as Bugatti sales, and not intended mass layoffs, that could boost the brand’s potential selloff from the Borgo Panigale.
according to The Financial Times“Following the success of the Everlens auction in increasing competition among bidders, advisers are expecting recent moves by VW to sell crown jewels such as its motorcycle brand Ducati – an idea it explored in 2017 – or to list supercar maker Lamborghini to take hold.”
Currently, Volkswagen AG owns several smaller, more pedestrian manufacturers as well as Ducati, Lamborghini and Porsche. However, those three remain the most well-known and potentially lucrative brands in that sector. These are the ones most likely to attract bids from potential new owners, as both the Everlens deal and Volkswagen’s recent one suggest. Sale of Bugatti to Rimac and a consortium of investors.
Similarly, smaller brands like Indian Motorcycle, which was bought by private equity firm Carrollwood LP, and KTM, which was sold to Bajaj AG, have shown that motorcycle brands are worthwhile investments and can bring good money for those involved in the sale. All that is to say, Ducati is several times bigger than each of those motorcycle brands, more famous than Everlens, and profitable. Therefore, any sale of the company would greatly benefit Volkswagen in improving its current financial position.
But this may not be in the cards.
As The Financial Times explains, “Some analysts said the likelihood of VW selling these brands is low and cautioned that selling loss-making assets such as Powerco (the brand’s battery maker) is unlikely to be as attractive as the Everlens sale.” Nevertheless, with the issues related to the company, Porsche’s own lossAnd with investors and financial analysts calling for divestment in its other companies, the sale of Ducati could be one of the measures used by VW to stabilize its business.
However, who will buy them is anyone’s guess. So while Everlens sold for €10 billion, it’s not Ducati. This is not in MotoGP. It has no pedigree or history or fan base. Those are a handful of orders of magnitude larger. So €100 billion? €200 billion? It’s anyone’s guess, but if true, it would be an industry shaker.
