We had earlier reported that Volkswagen is considering options for its motorcycle brand Ducati as it seeks to streamline its portfolio.
Eicher Motors-owned two-wheeler maker Royal Enfield has been approached by German vehicle maker Volkswagen (VW) to buy its Italian motorcycle maker Ducati Motor Holding SpA, The Times of India today reported.
On the other hand, Volkswagen's move to divest ownership in the Ducati brand comes as part of its attempt to fund its multi-billion Euro shift to develop electric vehicles following the emissions scandal. Sources also revealed that Eicher Motors - which is looking to secure global control for Royal Enfield in the middle-engine category - is seeking terms related to the acquisition and how Ducati could evolve within its own fast-paced activities. The company's MD and CEO, Siddhartha Lal, did not confirm or deny the approach, saying: "So basically, without saying absolutely no to anything - because we never say never - we are so zeroed in on our own opportunity that we do not want anything to distract us". The TOI mentions that Ducati's 800cc and 1200cc bikes will fill a void in the Enfield line-up, which now doesn't venture into that territory.
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According to the Reuters report, Ducati's annual earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at roughly 100 million euros.
A Reuter report suggests that VW is in talks with Hero MotoCorp and some Chinese brands to sell their Ducati brand. Its motorcycle sales grew 31% last fiscal and touched all-time-best sales numbers of 6.66 lakh units against 5 lakh units in 2015-16. In 2016-17 Royal Enfield sold over 6.6 lakh motorcycles, a growth of almost 32 per cent over the previous year. The company has reportedly set aside $18.2 billion for fines and expenses to fix as many as 11 million cars worldwide. Having sold 55,451 units a year ago (at a growth of 1.2%), Ducati enjoys a heavy network in primarily developed countries.