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Royal Enfield to buy Ducati?

If reports are to be believed, Royal Enfield’s parent company, Eicher is looking to buy the iconic Italian Motorcycle Manufacturer, Ducati!

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The market is already ripe with reports that Volkswagen, which owns Audi, which in turns owns Ducati since 2012, is looking to sell the motorcycle brand. Thanks to financial woes caused by its diesel pollution test cheating scandal.

Even though Eicher refused to comment on this and Siddhartha Lal, MD & CEO of Eicher Motors told media, “We are always open to thoughts and ideas. But we are the most focused and selective company… 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.”

There is enough hint in the tone of Siddharth Lal and reports in the market to suggest, Eicher is seriously considering this investment.

Ducati’s current valuation is around $1.5 billion euros (approximately Rs 10,500 crore) and it was originally purchased by Volkswagen for 860 million Euros (about Rs 6,000 crore).

Even though Eicher has deep pockets and by purchasing and then reviving Royal Enfield, it has proven that it does not shy away from difficult projects, analysts might initially term as bad investment. It remains to be seen, whether it is ready for an international foray, that will cost it thousands of crores in initial investment. An amount, it might not be able to recuperate for several years to come.

On a lighter note, if Eicher i.e. Royal Enfield does buy Ducati, I hope, they will not set the same quality standard for Ducati motorcycles, that they have for Royal Enfield motorcycles :D.

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