Audi abandons plans to liquidate Ducati

Gregory

December 13, 2017

If one has been tracking the news regularly, the notion that Audi may sell Ducati should come as no surprise. The ongoing saga has been brewing for quite some time but it seems that we finally have a solid, concrete answer. According to a news report by Reuters, the Ingolstadt-based manufacturer has gone on record to say that the brand is indeed dropping all plans to liquidate Ducati.

Even as Audi moves towards a future with a focus on EV (electric vehicles) and mobility solutions, the brand is keen on keeping Ducati as it sees “no economic need” to proceed with the sale. According to Audi AG CEO, Rupert Stadler, measures have been taken in order to reduce operational costs by €10 billion. Aside from that, the company has also worked to cut red tape and improve on ties with Porsche, another Volkswagen-owned name, as part of a “strategic realignment” for both brands.

Over the earlier quarters of the year, the Volkswagen Group had consulted several banks to work out if it was indeed financially viable to hold on to brands like Ducati and transmission manufacturer, Renk. The move stems from the brand’s effort to become more agile as it shifts its focus to EV and autonomous vehicles following the aftermath of the dreaded ‘Dieselgate’ emissions scandal.

“I can assure you that Ducati belongs to the Audi family,” commented Stadler. “Ducati is the perfect implementation of our premium philosophy in the world of motorbikes,” he added. Plans for the sale ran into a brick wall earlier this year when Volkswagen’s influential labour unions, backed by the controlling Porsche-Piech families, slammed the brakes and opposed the “need for asset sales given the group’s financial resilience.”

With that said, potential buyers of Ducati and investors have not lost all hope just yet. There are several parties that are convinced the Volkswagen Group will do a turnaround and offer up Ducati for sale. The reason being that said parties are convinced that the Ducati brand is the least valuable in VW’s portfolio in terms of strategy.

Investors of the Volkswagen Group have long favoured the simplification of the brand’s structure to help push through structural changes that are mostly at odds with the unions’ objectives. “For Volkswagen’s powerful works council it could be an easy bargaining chip they could offer to push through something completely different,” a source close to the matter disclosed.

A month ago, Audi reported higher operating profit and revenue for the first nine months of 2017 – the growth was buoyed by increasing demand in West Europe as well as the US. As a result, Stadler is adamant that holding on to brands such as Ducati and Lamborghini is vital to the company’s growth. “Looking after a premium bouquet is as difficult as the work of a gardener,” said Stadler.

“Therefore I am pleased with every new flower, with every promising new branch,” he added in reference to Lamborghini’s new Urus SUV. While the brand is still fighting an uphill battle as a result of ‘Dieselgate’, Stadler is optimistic that the Audi brand will be able to bounce back. “It’s a sign that we can slowly shift from crisis mode back into standard operation.”