Volkswagen Group Reportedly Opens Opportunity to Sell Ducati to Improve Financial Condition

JAKARTA - Volkswagen AG's financial condition is said to be facing considerable pressure. The German automotive manufacturer has the potential to sell off a number of high-value assets, including the premium motorcycle brand Ducati.

As reported by Rideapart, Tuesday, June 30, the speculation strengthened after Volkswagen managed to sell the Everllence ship engine business with a value of up to 10 billion euros. At the same time, Volkswagen CEO Oliver Blume also revealed the company's efficiency plan which includes reducing around 100,000 employees from a total of 625,000 employees across the group.

The success of the Everllence divestment is considered to open up opportunities for Volkswagen to consider the sale of other strategic assets, including Ducati which was previously rumored to be released in 2017.

In a report by The Financial Times, Volkswagen AG currently oversees a number of well-known automotive brands, such as Ducati, Lamborghini, and Porsche, in addition to several other companies that are smaller in scale. The three big names are seen as the most valuable assets and have high profit potential if they are released to new investors.

The sale of Bugatti to Rimac together with its investor consortium was previously an example that Volkswagen did not rule out restructuring its business portfolio. The market also assesses that the premium motorcycle industry still has strong investment appeal.

The acquisition of Indian Motorcycle by Carolwood LP and the entry of Bajaj AG into the rescue of KTM are examples that two-wheel brands have promising economic value. With a global reputation, a long history, and a large fan base, Ducati is estimated to have a much higher valuation than a number of other motorcycle brands.

However, not all parties agree that Volkswagen will actually sell its valuable assets. Some analysts say the likelihood of VW selling these brands is low and warn that selling a loss-making asset such as PowerCo as the manufacturer of the brand's batteries.

However, pressure on Volkswagen's business, which is also accompanied by the challenges faced by Porsche as well as the encouragement from investors for the company to divest, makes the option of selling Ducati continue to be discussed. The move is considered to be one way to strengthen the company's financial balance sheet in the medium term.

If it is released, the next question is who can acquire Ducati. The transaction value is still speculation. Unlike Everllence, Ducati is a brand that has a long history in the racing world, including MotoGP, as well as a community of fans spread across various countries.

Therefore, if the transaction actually takes place, its value is estimated to be far beyond the sale of Everllence and potentially one of the largest deals ever in the automotive and motorcycle industry.