Audi Volkswagen diesel scandal: Ducati in the hot seat ?

Entangled in the scandal of rigged diesel engines, the Volkswagen group sees its car sales and its stock market shares plummet and expects to have to pay colossal penalties. It could be brought to resell certain brands, like Ducati ?

On December 1, 2015 and for the second time in two months, Standard and Poor’s announced a lower note for the long-term debt of the car manufacturer Volkswagen, plunged since the end of September into the smoky scandal of rigged diesel…

To justify this drop by a notch (from A- to BBB +), the influential rating agency explains that "we expect Volkswagen to face negative credit effects related to its manipulations and misrepresentation of its engines’ emissions and fuel consumption levels".

"We see a tarnished reputation and brand image, poorer business prospects, a more difficult competitive environment, substantial costs and weakened financial metrics", continues the agency.

The 11 million diesel engines fitted with rigging software designed to skew the results of emissions tests – and the other 800,000 blocks with falsified carbon dioxide (CO2) emission levels – will cost the group dearly … But how much, exactly ?

In addition to the loss of a quarter of its stock market listing and the soaring rate of return on its bonds, the giant with 12 brands (see below), 600,000 employees and 200 billion euros in turnover year will have to face laborious recall campaigns and gigantic penalties…

The 12 brands of the Volkswagen group

Audi, Bentley, Bugatti, Ducati, Lamborghini, Man, Porsche, Scania, Seat, Skoda, Volkswagen Passenger vehicles and Volkswagen Commercial vehicles

In the United States, the penalty could reach 16 billion euros! A total estimate of 50 billion has even been circulating for a few days in the German press … With its first provision of 6.5 billion euros, Volkswagen is therefore very far from the account.

Even the bridging loan of 20 billion taken out last week from 13 banks will not allow the builder to absorb its colossal financial losses all at once. To insure its back – and reassure its lenders! – the VW group could sell some assets … or go public.

No smoke without diesel…

Rumors are rife on the web and the activities of the Man group unrelated to heavy goods vehicles are in pole position: its boats, mini-power plants, propulsion components or test systems generate 9.98 billion euros in turnover and 101 million operating profit, casually…

Other brands are also mentioned: "Volkswagen could also consider exiting the luxury brands Bentley and Lamborghini or the motorcycle brand Ducati, although these subsidiaries will not really move the cursor.", observes a relative of the file.

What would be the consequences of reselling Ducati? Last May, Ducati’s "very big boss" was delighted at the Site microphone to be ‘one of the 12 brands of a very solid, very reliable group, which offers us financial support"(reread our).

Without the support of the German colossus – with feet of clay – would the rich product schedules, successive sales records and ambitious sports programs still be relevant in Bologna? Mystery and crystal ball. MNC is investigating Ducati West Europe: stay tuned !

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