Looking Inside the Audi + Ducati Deal
byon 04-18-2012 at 05:02 PM (4351 Views)
It's been a big news day at Audi today, with revealed plans for a Mexican Q5 plant and the even more widely followed story about Ingolstadt's purchase of motorcycle manufacturer Ducati. We've found an interesting piece by HellForLeather's Wes Siler posted over on Jalopnik about this very subject ( HERE ). In the piece, Siler theorizes on why Audi (also Volkswagen) would pick up the storied motorcycle marque.
Siler has his own theories and we have ours. We'd encourage you to go to the link to read his, but also to read below to read ours.
The Volkswagen Group has shown themselves to place high value on brands with rich history. The company has shown nearly unparalleled expertise in picking up these brands and injecting them with product, marketing, etc. in order to elevate them to their maximum potential. Three very good examples of this the boutique brands of Bentley, Bugatti and (in the case of Audi AG) Lamborghini. All of these brands have flourished under Volkswagen Group ownership.
Our guess is that you could call this the SEAT principal. Volkswagen picked up the Spanish carmaker with little heritage to speak of beyond Spanish-built Fiats. Since that time the company has had little success turning the brand into a powerhouse, even with multiple racing efforts and a fair amount of product. It is our guess that SEAT taught Volkswagen Group managers that you can't just throw product at the wall and hope it's successful. Companies like Hyundai and Kia might suggest otherwise, but the Volkswagen Group has not been able to replicate this sort of magic and their expertise is more the rebuilding well-established brands... which probably explains why Volkswagen Group chairman Ferdinand Piech also made headlines with his desires to pick up lagging-but-storied Alfa Romeo as well.
The move to get into the motorcycle business by Audi and the Volkswagen Group is an interesting one. Certainly Audi has history here with its retired NSU and DKW brands. Audi itself built a one-off motorcycle prototype in the 70s that used an Audi 50 engine - this last one a project of Dr. Piech, an admitted motorcycle aficionado. Piech has always had a passion in bikes and also in Ducati for which he'd expressed interest publicly years ago. Piech missed his chance to pick up Ducati last time and it seems that this time he didn't waste his time snapping it up.
There are some economies of scale to be had here. Ducati has its proficiencies as does Audi. One can imagine direct-injection petrol or electrically powered Ducatis might not be far off. Still, the Volkswagen Group has shown itself to prefer a strategy of savings through mass production with economies of scale realized through volume. SEAT's very existence nowadays is largely due to the added volume it brings to the group.
In the grand scheme, Ducati doesn't produce that much. While Piech has said the Volkswagen Group would be just about perfect with 12 brands (now achieved with the addition of Ducati), we wonder if there won't be more moves to achieve economies of scale in motorcycle production. More two-wheeled volume would help move the group into covering all levels of personal transportation, and storied brands like Vespa (solely a guess on our part) seem interesting considerations as additions to the two-wheeled side of the group.
Brainstorming and theorizing on motorcycle possibilities, the KTM X-bow also comes to mind. This racecar for the streets powered by a 2.0 TFSI and packed in a Dallara chassis (just like Audi's LMP1 racers) is an interesting experiment. How cool would a jointly developed alternative sold as Ducati or Audi be?
Whatever the case, we're excited to see where this leads and we'll be doing that as we add Ducati to the list of additional brands we cover on this site, alongside others like Lamborghini, Spyker, KTM, etc. that share Audi DNA either financial or mechanical.
Full Story - Hell for Leather Article on Jalopnik
Press Release: Audi Buys Ducati