The Volkswagen Group is investigating the possible sale of its motorcycle arm, Ducati, just five years after having assumed control of the Italian superbike builder, according to reports out of Europe.
The possible sale of Ducati, currently owned by Audi, comes as part of the Volkswagen Group’s company-wide expenditure audit. According to Reuters, Volkswagen has already approached potential buyers however a final decision of the fate of Ducati is still pending.
From July 2012, Ducati came under the ownership of Audi, having previously being owned by two separate holding companies since 2005. At the time industry analysts questioned the need for Volkswagen to add a motorcycle division, seeing little economic value in the deal.
Regardless of any synergies between the automaker and Ducati, the deal went ahead and cost Audi €935 million (around A$1.1 billion at the time) and was seen as a way of giving the prestige brand a division with which to tackle BMW Motorrad.
Volkswagen’s then-chairman Ferdinand Piech fancied the brand for its design and engineering capabilities, but apart from the Ducati-powered Volkswagen XL Sport concept of 2014 no other connection between the automotive and motorcycle divisions have come to light.
Now investment banking firm Evercore has been tasked with investigating Ducati’s sales potential according to sources involved with the deal, with valuation estimates of between €1 billion to €1.5 billion (A$1.45-2.18 billion) or around 10 to 15 times Ducati’s annual earnings potential before taxes.
Frontrunners to take control of the Italian brand include Chinese and Indian firms, or private equity firms, with analysts unable to confirm if rival motorcycle brands like Harley Davidson or Kawasaki had shown any interest.