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Motorcycle maker Ducati to be bought by Audi for $1.1 billion

The purchase of the famed Italian brand would add to the German automaker's premium motorsports lineup. Audi also owns Bugatti and Lamborghini.

April 18, 2012|By Susan Carpenter, Los Angeles Times
  • A worker checks a motorcycle in an assembly line at the Ducati Diavel motorbikes factory headquarters in Bologna, Italy. Ducati sold 42,000 motorcycles globally last year and employs 1,100 people.
A worker checks a motorcycle in an assembly line at the Ducati Diavel motorbikes… (Alessandro Ruggeri, AFP/Getty…)

Ducati, the famed Italian maker of luxury motorcycles favored by celebrities and the rich, is being acquired by Volkswagen AG's Audi division for $1.1 billion.

The Ducati purchase would add to the German automaker's premium motorsports lineup. Audi also owns Bugatti and Lamborghini, the latter of which hired former Ducati North America Chief Executive Michael Lock in March.

"Ducati is a great brand name that probably could use a lot more cash to grow it out of the motorcycle niche," said Bill Nation, owner of the second largest U.S. Ducati dealership, Pro Italia, in Glendale. Nation speculated that Ducati might benefit from Audi's investments in expensive alternative drivetrain technology as well as manufacturing expertise.

Ducati sold 42,000 motorcycles globally last year and employs 1,100 people. It has manufacturing operations in Bologna, Italy, and in Thailand, where its factory can support strong motorcycle sales growth in Asia, Audi said.

In the U.S., Ducati has defied an agonizing three-year motorcycle sales slump. U.S. sales of Ducatis jumped 43% in 2011 versus 2010, compared with a 1.8% increase in new motorcycle sales for the industry. U.S. sales of new on-road motorcycles fell 41% in 2009 and 14% in 2010.

"Audi is scrambling for small engine technology," said Jim Martindale, partner with Navint, a management consulting firm in Chicago. "In the automotive space, so much focus is going to small displacement motors, high fuel efficiency and squeezing a lot of horsepower out of very limited displacement."

Automakers are racing to get the most power out of the smallest engines to meet increasingly stringent fuel economy standards in the United States and globally.

Ford Motor Co., for example, recently brought a three-cylinder engine Focus to the European market and says it plans to use the same 1-liter turbocharged vehicle in some of its smaller U.S. cars in the coming year. The engine generates 100 to 125 horsepower, depending on the model. BMW, which makes cars and motorcycles, also is working on developing powerful three-cylinder engines for cars it is developing.

Volkswagen, including its Audi luxury vehicle division, sold 8.36 million vehicles worldwide in 2011.

Audi's interest in Ducati dates to April 2008, when Volkswagen Chairman Ferdinand Piech said he wanted to buy the brand. Ducati was subsequently sold to Investindustrial, a leading European investment group based in Milan, Italy.

Ducati seems to have been grooming itself for sale over the past couple of years, introducing several new and innovative models, including its first hot rod, the Diavel, which went on sale last year, and the 1199 Panigale that will be available at dealers this weekend. The Panigale superbike boasts the highest power-to-weight and torque-to-weight ratios of any production motorcycle on the planet.

Ducati was founded by Adriano and Marcello Ducati in Bologna in 1926. It was originally a maker of radio parts. It began manufacturing motorcycles in 1949 and has since become synonymous with premium high-performance sport bikes.

"Ducati is known worldwide as a premium brand among motorcycle manufacturers and has a long tradition of building sporty motorcycles," said Rupert Stadler, chairman of the board of management of Audi AG, in a statement released Wednesday. "It has great expertise in high-performance engines and lightweight construction, and is one of the world's most profitable motorcycle manufacturers. That makes Ducati an excellent fit for Audi."

susan.carpenter@latimes.com

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