Volkswagen – under the helmanship of Ferdinand Piech & apparently on behalf of his prior engagement, Audi – has snapped up Ducati Motocycles for €860 million/$US1.1 Billion, the deal was approved days ago by the Piech-chaired VW supervisory board, raising the number of VW nameplates to 12. Audi, Bentley, Bugatti, Ducati, Lamborghini, SEAT, Porsche, Giugiaro, Škoda, Scania, MAN and of course VW.
Amusingly the marriage seems to have divided moto columnists. The fans of the sale seem to be bike enthusiasts, the naysayers seem to be business commentators. Piech is often portrayed as a big German kid in a toystoy, we think not, during his tenure Piech has reinvented, saved, turned-around and generally benefited more auto brands, indeed marquis, than almost any other single person, ok perhaps a little liberty there, you get the picture though ::::
Fluffing it up for the fans is our favourite flogger of shiny wheels, Gizmag, who wrote :: Audi has purchased Ducati Motorcycles. Not Volkswagen Group (Audi’s parent), but Audi, which is a subsidiary of Volkswagen Group. It seems a very good fit. It’s early days and the announcement has just been made, but as a fan of motorcycles in general and Ducati in particular, we’re all running around here like a rats with a gold tooth in reaction to the announcement. Audi has the enthusiast spirit in its DNA to appreciate the magic of the Ducati Brand and empower it. It will ensure the resources are there to enable the knowledge to grow and the brand to prosper. :: We kid you not! Read the entire post here, www.gizmag.com
Gizmag is of course right, the deal will enivitably be an Audi/Ducati marriage, however not a lot goes on within Volkswagen AG without a proper rubber stamp….
“The Ducati deal shows that Piech is an engineer and engineers are sometimes like little babies” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen and one of the most influential observers of the German auto industry. “It’s a new toy”
Bloomberg’s Businessweek went on the dissect and conquer bent, pointing out that the addition of Ducati isn’t likely to add much to the Volkswagen’s bottom line and may prove a serious distraction for Piech. Chris Reiter went on saying that folding in Ducati adds another project for VW management, which is already tasked with integrating Porsche SE’s carmaking operations, fashioning a truck alliance with affiliates Scania and MAN and thwarting Suzuki’s efforts to force it to return a 19.9 percent stake after their partnership failed. VW is aiming to overtake GM and fend off Toyota to become the top global carmaker.
Ducati last year sold 42,000 motorcycles, bikes like the $28,000 Superbike 1199 - pictured above - Panigale S Tricolore. The Bologna based company’s earnings were around €93 million/$US122 million in 2011. Ducati, which has won 13 rider’s Superbike World Championships since 1988, will extend Audi’s long-standing rivalry with Bayerische Motoren Werke to superbikes. In 2011 BMW Motorrad produced it’s 2 millionth motorcycle, as if that wasn’t enough to goad Volkswagen, 2011 was a bumper year for Bayerische Motoren Werke, sold 104,000 motorcycles.
“Ducati doesn’t enhance Audi’s business model in any way, it’s just a trophy in the wall cabinet” said Stefan Bratzel, director of the Center of Automotive at the University of Applied Sciences in Bergisch-Gladbach. “I can’t think of a concrete reason for Audi to warrant a business case for buying Ducati“
And while all this wailing is going on, it’s an ease to overlook the competitive ground Volkswagen has been laying, it has so far successfully turned flailing brands into well oiled, superbly tuned business machines – LAMBORGHINI - Volkswagen group plans to spend $US81 billion on products, technology and factory expansion over the next four years. It also has it’s sights firmly set on becoming the worlds number one automaker, with plans on toppling GM by 2018.
Critics have ranted over Volkswagens homogenization of automaking, drawing pictures of beautifully crafted pre-1998 Lamborghini’s – held together by deliciously designed pieces of Italian, U.S. and Indonesian twine – the serious question has to be, would Lamborghini be anyplace close to the URUS – above – if it weren’t for Volkswagen, Audi and more precisely PIECH and his wonderfilled vision!
“The Urus is expected to share its platform with the next-generation Porsche Cayenne, Audi Q7 and upcoming Bentley SUV, but is tipped to be about 220 pounds lighter than all of those. Power is expected to be provided by a 5.2-liter V10 that produces around 584 horsepower“
One thing Volkswagen doesn’t lack is money, the group sales revenue are up 25.6 percent to €159.3/ $US209 billion, operating profit has grown by over half to €11.3/$US14.8 billion year to date. Over the next four years, Volkswagen’s Audi division plans on investing $US17 billion in new products and factory growth. Audi plans to increase output, selling two million vehicles a year by 2018. It is currently expanding a plant in Hungary and plans to begin production in China in late 2013. The group also has plans for a plant in Mexico, producing the Audi Q5, the Mexican plant is due to commence production in 2016.
“We firmly believe that Audi and Ducati are an excellent fit” VW Chief Executive Officer Martin Winterkorn said today at the company’s annual meeting in Hamburg. “Both companies are sporty, global premium brands. We are convinced Ducati will substantially strengthen Audi and the entire Volkswagen Group”
While Audi is the world’s third-largest luxury carmaker, it is a distant fifth in the U.S., behind Germany’s Mercedes-Benz and BMW and Japan’s Lexus and Acura. Audi’s target is to sell 200,000 cars in the U.S. by 2018, up from 117,561 vehicles last year. By comparison, Mercedes sold 261, 769 in the U.S. last year, and BMW sold 247,907. It is clearly this battle that Audi, and it’s parent, Volkswagen has it sites set on, though getting to second largest automaker without a massive U.S. presence has to be a clue at just how clever this team is….