Audi drops plan for Ducati sale
Profitable motorcycle unit crucial amid costly technological shift
Germany-based Audi has abandoned plans to sell its Italian motorcycle brand Ducati, Chief Executive Rupert Stadler said, in a sign of confidence that the carmaker expects to be able to carry the costs of its transformation.
Steps to reduce costs by 10 billion euros ($11.8 billion), cut red tape and deepen ties with fellow Volkswagen (VW)-owned brand Porsche are “gradually increasing our financial and organizational leeway for the strategic realignment,” Rupert Stadler told reporters on Tuesday.
There is therefore no economic need to sell Ducati, Stadler said. “I can assure you that Ducati belongs to the Audi family… Ducati is the perfect implementation of our premium philosophy in the world of motorbikes.”
The sale of Ducati, the 91-year old business wholly controlled by VW’s luxury brand Audi, based in the Italian city of Bologna, was put on hold after resistance from German trade unions and internal rifts between Audi and its parent VW on strategy, Reuters reported earlier this year.
Labor leaders at VW, who hold half the seats on the 20-member board, have strongly opposed a sale regardless of price.
VW asked banks to evaluate options for Ducati and transmissions maker Renk earlier this year. It is seeking to become more nimble in its shift toward electric and self-driving cars following a diesel-emissions cheating scandal.
Investors and potential Ducati buyers, however, expect that VW could change its mind again and eventually opt to sell the asset that they said has the least strategic importance to VW.
“For VW’s powerful works council it could be an easy bargaining chip they could offer to push through something completely different,” a person close to the matter said.
Investors have long favored divestments to simplify VW’s group structure and strengthen its management’s ability to push through structural changes against the unions’ wishes.
Audi, which owns Ducati and Italian super carmaker Lamborghini, in No- vember reported higher operating profit and revenue for the first nine months, helped by growing auto demand in the higher-margin Western European and US markets.
While pushing the costly shift to zero-emissions and autonomous technologies, holding on to the profitable Ducati division and the lucrative Lamborghini brand has become more important, Stadler said.
“Looking after a premium bouquet is as difficult as the work of a gardener,” Stadler said. “Therefore I am pleased with every new flower, with every promising new branch,” he added, predicting Lamborghini’s sales would double on the back of its new sport utility vehicle.
Separately, Stadler said Audi will spend nearly 500 million euros over the next eight years on training staff for the digital age, with steps to develop and hire experts such as automotive app designers and car robotics specialists.
To rein in costs, Audi wants to keep headcount stable, at least over the next two to three years, even as it plans to have more than 20 electrified vehicles on the market by 2025 and pushes into digitalized mobility services, he said.
With two-thirds of Audi’s 60 or so models by 2025 still planned to be combustion-engine cars, tightening carbon dioxide rules will pose the “biggest risk” in the coming years, he said, adding that Audi would face 1 billion euros of fines if its average fleet carbon emissions exceeds EU limits by no more than 11 grams per kilometer.
Audi has overhauled its whistleblower system to allow domestic and international staff to warn of illegal conduct more easily, and it has also set up a permanent investigation office.
Early next year, Audi plans to dissolve a task force set up to monitor fixes for 850,000 diesel-powered cars that the automaker said in July needed updates with emissions-control software to help avoid potential driving bans.
“It’s a sign that we can slowly shift from crisis mode back into standard operation,” Stadler said, predicting the check-ups would be completed by the end of the first quarter.