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Home / Business / VW considers Lamborghini sell-off, stock exchange listing in search of higher market valuation: report

VW considers Lamborghini sell-off, stock exchange listing in search of higher market valuation: report



As the automotive industry adapts to changing technology and new standards, automakers as we know them can undergo quite a sudden shake. Volkswagen wants to be prepared – even if it means changing the way one of its most advanced makes does business.

Friday Bloomberg reported that Volkswagen Group CEO Herbert Diess is muggling opportunities for the future of Lamborghini. Citing individuals familiar with the matter, Bloomberg reports that Diesa's options include a complete sale of the Lamborghini brand and an initial public offering.

Selling Lamborghini to a third party, or spinning it, would enable the Volkswagen Group to focus on its core brands, VW, Audi and Porsche, and increase efficiency by further promoting modularity and reducing duplication efforts throughout the company. The group also owns car brands Bentley, Bugatti, Seat and Skoda, the Ducati motorcycle brand, and the Traton truck unit, which the Volkswagen Group turned off in an IPO in 201

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While thriving under the Volkswagen Group's Audi subsidiary, car manufacturer Ferrucio Lamborghini founded in 1963 has had a checkered ownership history. It changed hands three times after 1973 and went bankrupt in 1978. Chrysler bought Lamborghini in 1987 and sold it after seven years to a Malaysian investment group. Volkswagen bought it in 1998.

Under Audi's leadership, Raging Bull has been on the road to profitability, and even more since the introduced Urus performance SUV in 2017. In 2018, sales were up 51 percent year-over-year, of which 30 percent were from Urus. Future products can accelerate. Analysts predict the incoming hybrid sequences for Aventador and Huracan could lift Lamborghini's profit margins to 30 percent.

In August last year, the Volkswagen Group indicated that there were no plans to spin Lamborghini as a listed company. Similar listings among luxury car manufacturers have seen mixed results: Since Ferrari's release in 2015, the market value has nearly tripled, while UK manufacturer Aston Martin has lost more than 70 percent in valuation over the year since the IPO floated.

Perhaps the most important thing for Diess is that the Volkswagen Group strengthens its position in the face of fierce competition from Toyota, as it has fought for the title of the world's largest car manufacturer. Currently, the Volkswagen Group is valued at around $ 89 billion ($ 81 billion), and Diesa's forward-looking strategy, insiders say, is likely to increase the company's valuation by a factor of 2.5, effectively increasing its market share to $ 220 billion.

Although these strategies are still unknown and rumors are still unconfirmed, individuals close to the case say that the Germans have started the process of folding Lamborghini into their own legal entity and are expected to end sometime in late 2020.


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