After weeks of rumours, it was confirmed at yesterday’s Audi board meeting that the German premium giant will buy the Ducati motorcycle brand from Investindustrial for around £686m as well taking on Ducati’s debts of around £127m.
Most industry analysts are a bit puzzled by the move. OK, Ducati is profitable (around £76m) and makes very healthy margins. And, sure, BMW has its own motorcycle brand as well as Husqvarna. VW Group now encompasses 11 brands, from these high-end motorcycles to MAN heavy trucks.
VW’s autocratic head, Ferdinand Piech, has admitted that he wanted to buy Ducatti previously and regretted missing out on it. But empire building aside, why would VW want to add this tiddler to its operation? Officially, Audi boss Rupert Stadler flagged up the company’s ‘great expertise in high-performance engines and lightweight construction.’
Maybe Audi and VW Group are just happy to have a small-selling two-wheeler brand in the portfolio.
Then again, you just can’t ignore the fact that huge volumes of two-wheelers are sold in Asia Pacific. Globally, the motorcycle market is worth over 80 million units per year. According to recent research, the rise in electric motorbike and scooter sales should be worth an extraordinary 200m units between 2010 and 2016.
Population and demographic trends suggest two-wheel scooters and motorbikes are a serious future trend, one that four-wheeler companies cannot ignore. The concept of ‘Mega-City’ vehicles - tiny four wheelers that are halfway between a car and a motorbike - are already being explored and Audi and VW have both showed concept proposals.
Personally, I can’t help but feel that Audi’s acquisition is a step towards moving into premium two-wheelers and Mega-City vehicles. If you are going to jump into the two-wheeler market and you want to stay true to Audi values, you need a premium brand, especially in brand-obsessed Asia. And perhaps the Audi Urban concept will be more convincing with a Ducati engine or even launched as a Ducati.
Could this Italian motorcycle maker be destined for a future as a big-selling two-wheeler brand, offering the upmarket take on everything from electric scooters to mega-city four wheelers?
If I was an Audi strategist, it would make sense to me. After all, with Asia Pacific in love with the two-wheeler and likely to remain so as cities get ever larger, no car makers can ignore this major trend in one their most important markets.