Royal Enfield To Take Acquisition Of Italian Bike Maker Ducati

Posted May 08, 2017

Given the financial turmoil at Ducati's parent company - Volkswagen AG, the German automaker is evaluating the possible sale of the Italian brand that could fetch up to $1.5 billion (around ₹ 10,000 crore) to fund VW's multi-billion Euro shift to develop electric vehicles. Royal Enfield has left no stone unturned and is expanding aggressively in the market overseas. Eicher Motors, of which Royal Enfield is a part, did not comment on the development but Siddhartha Lal, MD & CEO of Eicher Motors, told the newspaper that the company is "open to thoughts and ideas". "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", Lal further said.

Other companies in the fray may include Suzuki, Honda, Polaris, Harley Davidson, the report said.

The Borgo Panigale firm is valued by some estimates at 1.5 billion euros (RM7.12 billion) and was acquired by Audi in 2012 for a reported sum of 860 million euros (RM4.08 billion).

The Italian company sold 55,451 units a year ago (at a growth of 1.2%), and enjoys a cult branding across the world with a healthy network in many developed markets. Purchase of Ducati, with its range of V-twins ranging from 400 cc to 1,299 cc, and covering everything from superbikes to dual-purpose touring to retro machines, would fit into Eicher's plans to make Enfield a "global brand". Royal Enfield is the second Indian manufacturer after Hero MotoCorp, that is rumoured to be in consideration to acquire the exotic motorcycle brand. RE is also one of the more profitable motorcycle companies worldwide, and that means Ducati has less to worry about financial support for the development of new motorcycles.

Royal Enfield, which has the market capitalisation of about Rs 52K cr, claims a market share of over 95% in its segment. Its reserves at the end of fiscal 2016-17 were over Rs 3,500 crore, growing by almost Rs 600 crore over the past six months. Volkswagen has been reeling under the diesel emissions scandal or Dieselgate which broke in September 2015. Having sold 55,451 units a year ago (at a growth of 1.2%), Ducati enjoys a heavy network in primarily developed countries.

Right now, Ducati bikes sold in India are manufactured in Thailand.