Wednesday, July 24, 2024


Business news agency Reuters has been carrying fairly vague and unattributed rumours that Volkswagen Group is once again reviewing the status of non-core luxury brands, specifically Ducati, Lamborghini and Bugatti. This move is apparently part of a five-year planning round geared to an urgent shift towards mass-market electric cars. BDN financial editor Roger Willis reports.

With “three people familiar with the matter” quoted as anonymous sources, Reuters said options under review include technology partnerships, restructuring, listing for share flotations and outright disposal. Pertinent to the latter, the agency claimed VW had held “preliminary talks with potential bidders for its Ducati brand to gauge potential interest in the motorcycle maker” in advance of November’s planning event.

VW chairman Herbert Deiss first expressed a desire to get rid of subsidiaries deemed surplus to requirements in 2017, identifying Ducati as one of several prime targets. But his attempt comprehensively hit the buffers, in the face of fierce opposition from powerful trades union representatives on the Group’s supervisory board. Union attitudes are likely to have hardened since then, given that less labour-intensive assemblies involved in electrification pose a major threat to jobs.

However, Diess did manage to proceed quite far with distancing a motley collection of unloved commercial-vehicle brands from VW’s key car manufacturing ethos. He transformed the Volkswagen Truck & Bus subsidiary, which encapsulated MAN and Scania, plus a stake in America’s Navistar truck brand, into a seperate German stock corporation (AG) in 2018. Shortly afterwards, it was remonikered as Traton AG then converted into a European entity, Traton SE.

Once the VW van business had been shuffled sideways into VW cars’ aegis, Traton was listed in Frankfurt and Stockholm. Some 11.5% of its shares were floated off via an initial public offering on these exchanges in June 2019. VW Group trousered £1.38bn from this exercise and is now perfectly positioned to reduce its Traton holding further whenever the opportunity arises.

A similar semi-independence approach to an ultimate exit might be both more politically acceptable and lucrative for Ducati and Lamborghini. Both are profitable and would be attractive to equity investors. Bugatti, a vanity project building very small quantities of premium-priced supercars, where returns are never going to cover R&D expenditure, is another matter altogether. 


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