Has Audi Bitten Off More Than It Can Chew With The Purchase Of Ducati?

Ferdinand Piech, who has added six brands during his two-decade tenure leading Volkswagen AG, is about to add another with the purchase of Ducati Motor Holding SpA. This time he risks overreaching.

The 860 million-euro ($1.1 billion) deal for the exotic Italian motorcycle maker, which was approved yesterday by the Piech-chaired VW supervisory board, raises the number of VW nameplates to 11 and stretches the automaker’s product range from 195-horsepower two-wheelers to 50-ton trucks. The addition of Ducati isn’t likely to add much to the company’s bottom line and may prove a distraction for Piech, who is already working on the integration of Porsche AG.

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chewy - 4/19/2012 1:10:15 PM

+3 Boost

At minimum Ducati would be able to save a good amount with its suppliers by buying at the VW Group rate.

USNA1999 - 4/19/2012 1:33:05 PM

+1 Boost

Will AUDI continue to fund DUCATI's scuderias in MOTO GP and WSBK? Valentino's contract is huge money.

AlleVier - 4/19/2012 2:28:36 PM

+1 Boost

I'm very interested to see what they'll do with Ducati. As chewy suggested, they might save some money through VW buying power, though I'm not sure it'll happen right away. However, they will probably save a bit from lowered debt costs, immediately.

I expect that they will want to get a least a little bit more out of this than to produce the same number of bikes for less money, though I don't think they should lower the price of Ducatis to get more volume. Rather, I think they should produce Audi-branded bikes (probably wouldn't pay to resucitate DKW or NSU?) either based on existing Ducati models (like the Gallardo/R8) or branch out into other bike styles (touring or dual sport?).

hubcap - 4/19/2012 4:57:39 PM

+2 Boost

Too much conjecture, too few facts.

Question? Why would this acquisition be more of a problem for Piech than any of the others?

In 2011, Audi made 5.3 billion in operating profit. They paid 1.1 billion for Ducati. They'll be fine.

skytop - 4/20/2012 10:51:59 PM

0 Boost

Audi is completely obsessed with BMW.
Since BMW has a motorcycle division, then Audi says "Me TOO!"

Audi knows NOTHING about cycling, spent too much money on Ducati, will confuse and interfere with the management of Ducati, and quickly lose control of Ducati. A total mistake that was predicated on avarice and poor business judgement. This certainly will be a cash sinkhole for Audi.