Audi buys Ducati

April 19: German luxury carmaker Audi has agreed to buy Italian bikemaker Ducati for US$ 1.12 billion. Audi will also inherit all of Ducati’s current financial liabilities.

Volkswagen-owned Audi was earlier negotiating with Ducati owner Investindustrial to buy out the Italian exotic bike maker, but it has now culminated into a deal. The marriage of the two automotive giants fits well with Audi’s ambitious ‘Project Eagle,’ aimed at elevating VW to becoming the world’s largest auto manufacturer. Earlier, Andrea Bonomi, Investindustrial head, had stated that Ducati was looking for a world-class industrial partner for its future growth and wanted to sell the iconic brand for a billion Euros.

Rupert Stadler, chairman of the Board of Management of Audi AG, said: “Ducati has great expertise in high-performance engines and lightweight construction, and is one of the world’s most profitable motorcycle manufacturers. That makes Ducati an excellent fit for Audi.” The progressive control systems and special combustion chamber process of Ducati engines, sporty character, and Ducati’s extensive know-how in lightweight construction offers great potential for Audi and the Volkswagen Group.

Ducati has manufacturing operations at its headquarters in Bologna and in Thailand. It maintains a series of importer companies in strategic markets, including India. Experts predict that the motorcycle market will enjoy strong growth over the next few years, especially in Asia.

The purchase will make Ducati the 11th brand in VW’s portfolio. Ducati sold 42,000 motorcycles through 2011 and generated revenue of around €480 million; it has a nine percent share in its segment. The company has been making all the right moves over the past few years, launching segment-leading motorcycles like its versatile Multistrada 1200, the Diavel power-cruiser and 1199 Panigale race replica.

Ducati has been around in the Indian market for around three years. It entered India through a partnership with Precision Motor India, which is the exclusive importer of Ducati motorcycles in the country. The first showroom came up in Mumbai in November 2009, followed by the second one in Gurgaon in December 2009. Later, the Italian superbike maker opened an outlet each in Bangalore and Ahmedabad but both were shut down after a while.

Thus far, the company has sold over 100 Ducatis from the Mumbai and Gurgaon dealerships and aims to sell around 200-300 bikes this year. The expectations have gone up after the launch of the Monster 795, the cheapest Ducati offering so far, which currently retails at Rs 6.99 lakh (on-road, Mumbai). The Asia- specific Monster 795 is a made-in-Thailand Ducati and the lower price is courtesy the FTA between India and Thailand. Ducati plans to have 13 dealerships in place by end-2012 in India and at present has 17 models on offer.