Looks like Bajaj-KTM are gunning for buying out Ducati.
Volkwagen is on the heels to sell the Italian brand, and everyone is prying.by Sagar Patil, on
A week ago, rumours filled the news about Harley-Davidson being the top contenders to buy the luxury two-wheeler Italian marquee from Volkswagen. For no fault of theirs, except for them being owned by VW, Ducati could possibly see a change of hands since the German company is in considerations of selling brands under its portfolio.
Now, there could be a new chapter in Ducati’s history books, courtesy, the Volkswagen Diesel Gate scandal. If reports are to be believed, KTM-Bajaj was approached by the German company to buy out the Italian brand, an initiative taken towards the new financial strategy set out by the company post the Diesel Gate scandal.
Bajaj is one of the world’s largest motorcycle manufacturer based in India. We all know how well KTM has partnered with Bajaj to handle most of the Austrian brand’s operation now, including manufacturing all the KTM bikes at its Chakan facility in Pune and selling them all over the globe. Along with this, Bajaj-KTM is now close to securing a similar takeout with the Ducati brand, mainly because of KTM’s interests in it.
Owned by AudiAg via Volkswagen, Ducati has created 90 years of passion, emotions and excellence. The history of Ducati is driven by a unique engineering talent that has always generated motorcycles of unmistakable design and most profound sporting spirit. These years have a long tale of events and facts making the brand one of the most iconic motorcycle manufacturer history will ever know. It continued its upward trend, and it also went on to mark its record sales of 54,800 new motorcycles delivered to customers worldwide in 2016 and now it is looking at entering heavily at emerging economies like India and China.
Yet, VW is forced to let go of such a historic brand from under its umbrella due to the hot soup it got itself caught with. VW had bought Ducati in a ₹ 6000 crore deal back in 2012, and everything was going great until the Diesel Gate scam rocked VW badly. This led to VW paying hefty fines and incur massive losses to the tunes of multi-billion euros to recuperate their mistake, and this costed them dearly.
They had to stop all technological developments and lay off thousands of jobs to streamline their financial situations. In this process of realignment of financial strategies, sources close to the company claim that it is considering to chop off a few brands from its arms and sell them to potential buyers, one being our very own Harley-Davidson and now the Indian, Bajaj.
Rajiv Bajaj, MD of Bajaj Auto said, "We are very close to finalising a very promising alliance, it’s not certain, that it will happen, but if it happens, it will open up enormous possibilities for the company. That is why we keep our money (cash on books) with us, so, once in a while, when an opportunity comes along, we are ready."
For the record, Bajaj Auto as on date held free cash of about ₹ 12800 crore.
Apart from Harley Davidson and Bajaj, there could be other buyers also interested in investing here. Polaris, Royal Enfield, the Japanese Trio to name a few. If VW does not attract sufficient interest, it may also consider a stock market flotation for Ducati.