Is Volkswagen about to sell Lamborghini?

Report suggests that VW’s set to spin off Lamborghini into a separate entity

VW may sell Lamborghini

Volkswagen AG appears to be assessing its options regarding Lamborghini, as a Bloomberg report suggests that the company is looking to focus future expansion on just three of its 12 brands – Volkswagen, Audi and Porsche.

The driver behind the divestment of Lamborghini is said to be Volkswagen’s aim to double its market value ahead of a predicted industry shakeout. A sale or stock listing are said to be the preferred options for Lamborghini, but no firm decision has been made and it’s more likely to be a medium-term goal.

VW CEO Herbert Diess

German newspaper Suddeutsche Zeitung published an interview with VW’s CEO Herbert Diess last week appearing to confirm the business strategy.

“We shouldn’t spread ourselves too thin,” said Diess, “That might be hard in some cases, but it’s the only viable way.” Having completed an IPO of the Traton truck unit earlier this year, Diess, who took up the reins at VW in April 2018, has shown a willingness to spin off non-core businesses.

Lamborghini could well be a very attractive target. With the Urus doubling sales to around 7000 units per year, the Sant’Agata business is valued at around US$11 billion (A$16 billion), and with a replacement for Aventador on the way with a possible fourth model line in the works, the company’s in good shape. That’s relatively small beer compared to Ferrari’s US$30 billion valuation, but the way that Maranello calved from Fiat offers a template for Lamborghini to adopt.

Lamborghini Urus SUV
Lamborghini's Urus SUV

\Volkswagen has invested more than any other manufacturer in the transition to an electric future and Porsche-Piech family board members have expressed their support in maximising the company’s valuation to capitalise upon this switch.

Diess is targeting a market value of US$220 billion for Volkswagen, from a current base of US$81 billion. In other words, Volkswagen is sharpening its claws and going for the kill. Anything other than its core business units could well prove an unnecessary distraction.

 

 

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