The Volkswagen Automotive Group (Volkswagen AG) is the owner of Volkswagen, Porsche, Audi, Bentley, Bugatti, and other brands, including Ducati. Volkswagen AG is switching up Ducati’s setup within the Group, which could lead to Ducati being either up for sale or available for the average rider to own via an initial public offering.
Usually I prefer to stick to in-depth news pieces, rather than short news blurbs, but there’s so much motorcycle industry buzz this week about Ducati, Harley-Davidson, Yamaha, and Suzuki that I just had to get this content out quickly to you guys. Let’s carry on.
Click the little unmute button in the bottom left corner to unmute the video.
A restructuring at Volkswagen (Ducati’s parent company)
Volkswagen AG Chief Executive Officer Herbert Diess announced that Ducati (along with Lamborghini and Italdesign) will be restructured within the organization in such a way that would allow Volkswagen to be able to act should there be a decision made to change ownership of the brands.
Volkswagen AG admits that no decisions have been made in terms of selling assets, investments, or divisions within the organization, and that divestments aren’t necessarily a top priority for the Group right now, but Diess admits “it’s on our agenda.”
Frank Witter, Volkswagen AG’s Chief Financial Officer says it’s part of an on-going project to simplify and restructure Volkswagen AG’s expansive portfolio. It’s a project that’s been in-progress since 2016, at the time of Volkswagen’s diesel-emissions disgrace.
What does this mean for Ducati?
With neither of the C-Level executives giving any sort of timeline or future prospects of what’s to come, we’re left to speculate what this all could mean for Ducati’s future, but we have a clue which we can try to draw some conclusions from.
The clue: Volkswagen wants to focus on electric vehicles
According to experts, Volkswagen sees the future of automobiles moving towards electric-powered vehicles, and experts see the organizational restructuring as part of Volkswagen’s goal of being able to bring the fight to Tesla’s dominance in the EV market.
Ducati’s performance hasn’t been consistent
2019 saw Ducati reaching record-level sales, and the Panigale reached the status of being the world’s best-selling superbike for two years in a row. Everything was on the up-and-up for Ducati at the end of 2019.
Unfortunately, 2020 hasn’t been kind to Ducati. Ducati’s production is based in Bologna, and the Italian brand relies heavily on domestic sales to stay afloat. Unfortunately, lockdowns in Italy meant that Italians found themselves out of town and stuck at home, which hurt the local motorcycle industry. Likewise, Ducati employees also found themselves out of work and stuck at home as the plant was shut down temporarily.
Unable to produce motorcycles meant that Ducati couldn’t keep up with the international demand for it’s motorcycles in 2020, at the same time as domestic sales tanked, despite consecutive years of sales growth prior to this year.
So what’s next for Ducati?
It’s speculated by industry insiders that selling the hot-and-cold Ducati brand could free up cash and valuable resources for Volkswagen to invest in it’s plans to be a future leader in electric vehicles.
So what’s next for Ducati? Well, a sale to another motorcycle parent company could happen in the next two to three years. If I had to guess a country, I’d like to point out that in the past year we’ve seen big acquisitions by two Indian motorcycle giants: Hero MotoCorp buying up a 49% share of Erik Buell Racing, and TVS Motors buying up Norton Motorcycles.
There’s another potential outcome for Ducati though… You could buy it
We know that Ducati is a divisive topic within Volkswagen AG boardrooms: Three years ago Volkswagen started to push for a sale of Ducati. According to a Bloomberg report, the effort gathered interest from companies such as Harley-Davidson and others, but was put to bed by the Porsche and Piech family owners along with Italian labor unions. They wanted to hold on to Ducati and keep it part of the Volkswagen family.
At the same time, we also know that Volkswagen AG wants to free up capital and invest heavily in electric vehicle research, development, and production, to challenge Tesla for EV leadership.
So how do you keep Ducati, but at the same time leverage the brand as a tool to raise capital?
So the other option is rather than sell Ducati completely, Volkswagen AG opens Ducati up for an IPO. The AG (and it’s proxies) would keep control of Ducati by maintaining the voting and preferred shares, but by opening up Ducati to shareholders, they could also bring in a ton of capital to invest in electric vehicles.
So, basically, you could own a little piece of Ducati by 2022, and though that’s less likely than it being sold outright (probably to an Asian motorcycling giant), never say never.