Volkswagen might not sell Ducati

Due to a lack of support from VW’s supervisory board, things point to Ducati staying with the group.

Published On Aug 01, 2017 06:02:00 PM

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Ducati factory

The internet has been rife with news of the Volkswagen Group putting Ducati up for sale. In fact, as of July 29, there have been five confirmed shortlisted bidders looking to acquire the Italian motorcycle maker, offering between 1.3 to 1.5 billion Euros for the brand – Polaris Industries, Bain Capital, PAI from France, private equity fund and Ducati’s previous owner Investindustrial and most recently, the Benetton family. Even Indian companies like Eicher Motor and Bajaj Auto were said to be initial bidders, but it seems that they haven’t made the final cut of bidders.

Now, however, according to a report from Reuters, the sale of Ducati might not go through as Volkswagen’s supervisory board hasn’t backed this decision, which was made by the management board recently. This came in a bid to streamline operations following the announcement of a multi-billion Euro shift to electric cars and new mobility services back in June 2016, in light of the Dieselgate emissions scandal.

The 20-member supervisory board of the VW Group, of which half the seats are occupied by the company’s labour leaders, felt that the sale of Ducati didn’t come from compelling enough financial reasons. And it’s easy to see where this feeling comes from, as the entire Volkswagen group had a 19 percent increase (about 8.9 billion Euros) in their six month operating profit. This was thanks to cost cuts and improvements in R&D at Volkswagen (the manufacturer, not the group), which cut the group some slack from the billions of Euros they need to shell out for fines, refits and compensation in lieu of Dieselgate.

Speaking to Reuters, a spokesman for the VW Group’s works council said, "The employee representatives on Volkswagen's supervisory board will neither approve a sale of Ducati, nor one of Renk or MAN Diesel & Turbo. Everyone who can read the VW half-year results should know: We don't need money and our subsidiaries are not up for grabs by bargain hunters.”

Other sources at the company have stated that the Porsche and Piech families, which control 52 percent of voting shares in VW and have four seats on the supervisory board, are not in favour of selling Ducati either. However, neither family has officially commented on the same yet.

The works council spokesman added, “The management board has not even asked the supervisory board of Volkswagen, where such sales have to be ratified, for its approval. Therefore we advise all supposedly interested parties: Save your time to check any books. A sale will not happen."

Thanks to this strong opposition from the union, the plan to sell Ducati is being reconsidered, another source at the company stated. It seems the group doesn’t want to antagonise workers through the VW brand’s turnaround plan, which its investors see as crucial after the loss of face suffered after Dieselgate.