Audi Gunning for BMW with Ducati Deal

Volkswagen AG sent shockwaves a couple of years ago with its bold declaration of its scheme for world domination, with a stated goal to become the world's #1 automaker by 2018. Then it began taking steps to do just that.

Today, the company's luxury brand sent a similarly strident message. The Volkswagen Group's Audi division confirmed rumors that it wants to take on take on BMW and go wheel-to-wheel with its cross-nation rival for global supremacy by buying Ducati Motor Holdings — and its premier motor bikes with names such as Street Fighter, Monster and Diavel — for an estimated $1 billion.

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

Founded in 1926 in Bologna, Italy, Ducati is owned by Investindustrial Group and long has been coveted by VW's influential supervisory board chairman and former CEO, Ferdinand Piech, who reportedly owns a Ducati motorbike and who expressed interest four years ago in acquiring the brand.

The move is the latest bullish foray by Audi, which trails BMW for the title of world's best-selling luxury automaker and is trying to catch up there as well. At the same supervisory-board meeting today, Audi chiefs also set plans to build the brand's first North American assembly plant in Mexico, where the company plans to begin building a new SUV in 2016.

According to the New York Times, however, not all observers are sold on Audi's acquisition of Ducati:

(Some) analysts have questioned the move, saying the company was overvalued and would not offer technologies that could readily find their way into Audi’s engineering, despite Ducati’s experience in wringing big power from compact engines. The purchase does, however, give Mr. Piëch, an avowed motorcycling enthusiast, a toehold in the industry.

It was not clear how the deal might affect Ducati’s relationship with AMG, the in-house tuning division of Mercedes-Benz, with which it has offered matching color combinations on special-edition vehicles. In the weeks after Car magazine’s initial report, Daimler, the parent of Mercedes-Benz, repeatedly denied interest in buying Ducati.