Is Bajaj Auto Eyeing Ducati To Boost Its Global Presence?

Avishek Banerjee May 12, 2017

Speculations are rife about Eicher Motors-owned Royal Enfield being in talks with Ducati Motor Holding S.p.A to scale up its global presence. But, if sources are to be believed, it’s Bajaj Auto Managing Director Rajiv Bajaj who is eyeing the Italian bikemaker.

There are also reports of Ducati’s parent company Volkswagen AG in talks with few Asian bikemakers, including Bajaj Auto.

“If there is one company which is secretly eyeing Ducati, it is Bajaj Auto. Logically, it makes more sense for Bajaj to go for inorganic growth than Siddhartha Lal, (MD and CEO, Eicher Motors). Royal Enfield is doing pretty well and is more focused on expanding its overseas base with its own set of bikes rather than concentrating on a foreign brand. But, for Bajaj Auto, which seeks to be the biggest bikemaker in the world, would not have waited for a golden opportunity like this. Having said that, it all boils down to the valuation of the brand and how it is mutually beneficial for both parties and the acquired company,” a source told BW Businessworld on conditions of anonymity.

It may be noted that Reuters had earlier reported about Hero MotorCorp taking a shot at acquiring Ducati. But, a recent Times of India report stated that Royal Enfield has reportedly approached to acquire Ducati for 1.5 billion euros (approximately Rs 10,500 crore).

Another source maintained, “It is more than a mere business speculation. Harley Davidson was also supposed to be in talks with Ducati to buy over the company but it didn’t work out. But if Bajaj Auto outbids other players in buying Ducati, it will mean more management control to the latter apart from creating more stability, cheaper spares, etc. So, if all goes well, Bajaj Auto should be able to clinch the deal as it has a good experience with other European player like KTM.”

Despite being approached thrice by BW Businessworld over emails, there was no response from Rajiv Bajaj. S. Ravikumar, President-Business Development, Bajaj Auto, also refused to comment on this.

Andrea Seltmann, Corporate Communications Manager, Ducati Motor, in an emailed reply stated, “We are very sorry but these are market speculations that we cannot comment on.”

Puneet Gupta, South Asia Manager-Vehicle Sales Forecast, IHS Markit, said, “With aspirations of Indian consumers rising, it makes sense for mass players such as Bajaj and Royal Enfield to acquire brands like Ducati. They can extract the maximum advantage as they have a strong customer base which can be exploited as some of these customers will definitely be looking for an upgrade. Indians are young and ambitious and would like to follow the world; so, this may be a great opportunity to eye a brand like Ducati. Also, I feel it’s a win-win for both as the Indian player can only give excellent valuation for the brand and Indian brands get an opportunity to enter into segments which will help them boost the revenue.”