Volkswagen May Have To Part With Bentley, Lamborghini, Ducati To Get Past DieselgateAuto News
That would be a shame. Alright, so we can all safely say that Volkswagen has seen much brighter days than this. Actually, we can calculate that as being the case up until late September 2015 when it was discovered that it made a concerted effort to falsify emissions testing results on its cars fitted with diesel engines.
A Reuters report discloses that the automaker juggernaut has secured a credit line amounting to more than US$ 21 billion in order to pay the stacks upon stacks of legal and material compensation to rectify the scandal and its mushroom cloud of repercussions.
Reportedly, the Volkswagen Group has agreed upon a one-year loan. And to convince its creditors, have had to place brands under its corporate umbrella such as Bentley, Lamborghini and Ducati on the betting table should it not able to repay the sum within that period.
"Volkswagen may also consider divesting luxury car brands Bentley and Lamborghini or motor bike brand Ducati, although these units don't really move the needle," one of the sources said to Reuters.
That fortune being borrowed comes from 13 separate financial institutions throughout Europe and Volkswagen is planning to refinance the loan through the issue of bonds handed out within the next few months.
Of course, those three brands are but a portion of the many under the Volkswagen Group. Others include Audi, Porsche, Seat, Bugatti and Skoda, but they have seemingly been spared fatalistic limbo because the three previously mentioned were considered more niche products that generate relatively small annual contributions to the Group’s financial bottom line.
Having said that, should Volkswagen have to spin off Lamborghini and Bentley, they will be relinquishing their stakes in two very established and powerful brands. Both of which give the Volkswagen Group a solid foothold in very key sectors in the automotive industry, sectors that have arguably the highest mindshare and aspirational value.
Right now, nearly 500 lawsuits reportedly have been levelled against Volkswagen, Audi, and Porsche in the United States since the scandal broke, making up a large bulk of where the restitution amount will end up going. The rest will be used to cover other fines and vehicle refits across the globe. An early estimate to the total sum this scandal’s cost to Volkswagen is reportedly north of US$80 billion.