Hero MotoCorp could purchase Ducati from VW Group for $1.5 billion (INR 9,620 cr)

Hero MotoCorp could purchase Ducati from VW Group for $1.5 billion (INR 9,620 cr)

Seeking to move on from admission of cheating on emission tests, Volkswagen Group is considering a re-haul of its corporate strategy.

0

Volkswagen, faced with a need to settling an estimated €16.2 billion in fines and expenses as a result of its emission cheating scandal could be considering selling some of its brands that include Ducati, Scania and MAN. This will allow the company to recover some of its losses and get the company back on track.

Chief Executive Officer, Matthias Mueller is in the process of strategy review that targets Volkswagen AG’s current portfolio that includes Ducati, Scania, and Man brands among the company’s 12 brands and side businesses, reveals Bloomberg.

Even Royal Enfield is reportedly interested in buying Ducati.

Under the VW Group there are brands like Audi, Bentley, Bugatti, Lamborghini, Porsche, Ducati, MAN, Scania, SEAT, Skoda, and Volkswagen. In their bid to become the largest car maker in the world by 2018, VW Group was on a spree collecting brands as and when possible. Dieselgate has probably brought a halt to this spree, atleast for now. Selling brands will bring in cash as the company faces severe losses due to fines levied for its diesel emission scandal. While the company had set aside $18.2 billion to cover losses due to fines, recalls and repair costs, it needs to refill its coffers with sale of brands being its only recourse.

A Reuter report suggests that VW is in talks with Hero MotoCorp and some Chinese brands to sell their Ducati brand. Right from the start, when Audi purchased Ducati in 2012, there have been problems within the group as many were not of the opinion to purchase Ducati. But Audi still went ahead and completed the purchase. Now, with VW reeling under pressure, it seems that Ducati is the first one to be sold. The valuation of Ducati has been set at $1.5 billion (or INR 9,620 crore).

Hero launched the new Glamour in Argentina.
Hero launched the new Glamour in Argentina.

The news about Ducati being sold to Hero MotoCorp comes a few weeks after it was reported that Ducati is planning to partner with Hero MotoCorp or Royal Enfield. Though yet unclear what is the real deal, one thing is for sure – If Hero MotoCorp can manage to purchase the Ducati brand, it will be a huge boost in their aim to become a global leader in motorcycles.

Continue Reading