AUDI acquires Ducati

  • What could be the strategy behind the acquisition of Ducati?
  • How will this add value the brand?
  • What type of consumer is Audi adding to its repertoire with this acquisition?
  • What demographic and/or markets do you think Audi will now be able to reach?
  • How might affluent consumers react?
  • What type of marketing might we see Audi using for its Ducati vehicles?

“In my opinion . . .”

From a branding, market positioning, and financial standpoint, decisions that VW (Audi) makes do not always seem logical to me.

Case-in-point, the VW Phaeton: a full-size luxury sedan/saloon that the chairman of Volkswagen Group, Ferdinand Piëch, hoped to build to compete or surpass Mercedes-Benz and BMW. Well, everyone in the US knows that VW built its brand/reputation here on small, cute/ugly, affordable, dependable cars. VW had made its mark by “owning” a different automotive category than Mercedes-Benz, and once a brand sticks in the mind, it’s very difficult to change the perception.

I would assume the chairman’s hubris would not entertain such a basic notion of marketing and branding, and that he knew better, so the car was produced . . . with a retail price hovering around the $100K mark. Yes, the car was a technical tour de force, but sales in the US proved to be “less than anticipated,” and in 2006 sales in the US were halted. This mistake could have been avoided if the powers-that-be would think like a consumer: the Phaeton lacked “social currency,” i.e., no matter how brilliant the car was, it still had a VW badge on the front. (Note: in Europe VW kept sales of the car going until 2009. Now VW is about to try it again with a new version with an emphasis in China.

Well I believe, the same man, Ferdinand Piëch, has also been contemplating purchasing Ducati for decades. In my opinion, this acquisition has also more to do with corporate ego than with a logical, rational and sound financial investment.

Yes, Ducati probably has a lot of patented technology in the engine designs, but then again VW has a LOT of money and a very large resource of engineering of its own.

Yes, Ducati’s brand has an associated lifestyle component (think of it as sort of a two-wheeled Ferrari), but I don’t see how two wheels can help four wheels in boosting a brand. Yes, Ford licensed the Harley-Davidson brand so it could create a Harley-Davidson edition of its pickup truck, but that was licensing . . . this is a full blown acquisition. Would a “Ducati version” of the Audi TT make an impact? Only slightly. To some it would be laughable.

Back when Ford owned Aston-Martin and Jaguar, the designs started to lack passion and performance. Now both of those marques are under new ownership by smaller companies, they again are something special. Like VW, Porsche built its brand on being a single-minded: a pure sports car maker. Once it was owned by VW and it created SUVs and four-door line extensions, Porsche became just another automotive manufacturer. This is why the CEO at Ferrari stated a few years ago that the company will never build a four-door . . . or a SUV.

I will prognosticate and say that the acquisition of Ducati will dilute its brand purity and passion . . . Ducati’s management will chafe . . . the brand will suffer from a series of line extensions that will dilute Ducati’s positioning in the mind of the consumer and market space.

Photo credit: Audi Media Services


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