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If buying a sports car is a classic sign of the midlife crisis, Volkswagen appears to be maturing gracefully. He values the sale of the iconic Lamborghini, the prized automotive gem of the nouveau riche of cryptocurrencies and the children of the sheikhs on Instagram. Given the planned shift to electric cars, ditching the brand at a great profit makes a lot of sense. Consumer cars are a bad match for VW’s goal of becoming the world’s first supplier of carbon-neutral vehicles. But it doesn’t irritate its clientele: Lamborghini sales were up 32% in 2019.
Owning niche car-enthusiast brands like Lamborghini (as well as oligarchs’ favorite Bugatti and sports bike Ducati) makes little sense in this context. At the beginning of the year, Aston Martin Lagonda deferred its electrical plans for the immediate future. Even Ferrari doesn’t plan to release a battery-only version before 2025. By then, Diess is aiming to sell up to 3 million battery-powered vehicles, a fifth of VW’s production.
Putting value on Lamborghini is difficult, as VW does not publish its finances. Still, using approximate prices online, it follows that it could have made about $ 2 billion in sales last year, with 8,664 vehicles produced. Assuming a 16% margin, midway between Audi and Ferrari, it would have generated 326 million in operating profit. Applying it a multiple of 25 times to reflect recession-proof customer demand (less than Ferrari’s 33 times), it could be worth $ 8.2 billion.
That, which is one-tenth of VW’s current market value, would represent 82 times more than the roughly $ 100 million VW paid for the business in 1998. Diess could return the profits to shareholders. Or help pay for the 33 billion euros of investments for the green transition in the next four years. Either way, making a ton of money off the nouveau riche is an easy decision.
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