IDN 101 May 2012

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COMMENT: Mixed messages from Europe’s first quarter motorcycle sales statistics ........................Page 3

Germany returns to growth as other major European markets continue to see sales decline in first quarter ..................Page 48, 6-8

MAY 2012 ISSUE #101

Volkswagen Audi Group confirms purchase of Ducati

PRODUCTS

FTER the speculation generated by their reported period of exclusive due diligence, the Volkswagen Audi Group in Germany (VAG) has confirmed its decision to buy Ducati Motor Holding S.p.A. The deal is said to involve VAG paying Ducati’s parent company International Motorcycle S.p.A., a subsidiary of the Investindustrial Group, some 860 m euro for Ducati, which includes taking on responsibility for 200 m of Ducati debt. Given the recent and current sales and profits performance of the legendary Bologna based manufacturer, some are seeing it as a piece of shrewd dealing by the German car giant. However, other analysts, ones who are possibly closer to the factory and the realities of the balance sheets involved, believe it is as much a brand vanity acquisition as a piece of smart business. This school of thought believes that VAG are paying a

A

financial premium to complete an acquisition that has been haunting group Chairman Ferdinand Piech (a self-confessed Ducatista) ever since he failed to buy Ducati when the Italian Government put it up for sale in 1984. Net of debt, VAG is paying around seven times 2011 EBITDA to buy Ducati. Either way, it is thought that Audi AG is being put up-front and centre in the deal by VAG as a signal to closest luxury car rival BMW, who, of course, also has a (increasingly strong) position in the motorcycle market. Ducati now takes its place in a lineup of leading brands that includes Bentley, Bugatti and Lamborghini; a line-up that will also, no doubt, see VAG’s 49.9 percent stake in Porsche converted to complete ownership at some stage in the coming years, unless postponement of the merger announced in September 2011 due to legal risks, including a criminal probe, the legal risks prove permanent. This is not VAG’s first foray into the contemporary motorcycle market though, as it has owned a 19.9 percent stake in

Suzuki since the beginning of 2010. IDN reported that the Bonomi family, the major stakeholders in Investindustrial, were poised of offload Ducati, and in an April 18th press release Andrea C. Bonomi, Chairman of Investindustrial, is quoted as saying “the management team, led by Gabriel Del Torchio, and Ducati’s skilled and passionate workforce have been a key element in turning the company into a global brand with some of the most exciting motorcycle models currently on the market. “I am convinced Audi will be a responsible new owner, preserving the Italian workforce’s technology skills for a bright future for the company.” Interestingly, in addition to profits and brand strength, the press release issued simultaneously by Audi AG also highlighted Ducati’s technology and manufacturing skills as a major motive for the deal. Rupert Stadler, Chairman of the Board of Management of AUDI AG, is quoted as saying “Ducati is known

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Pages 35-43

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NEws ROOM 6-12, 48 TRADEZONE 44-45

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INDEX 46


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