Hyundai Motor Group Eyes Lamborghini and Bentley: A Game-Changer for the Auto Industry?

An Unprecedented Crisis for the Volkswagen Group
Could Lamborghini and Bentley Be Sold?
Hyundai Motor Group’s Acquisition Possibility Discussed

Imagine the shockwaves in the automotive world if supercar brands like Lamborghini and Ferrari were suddenly produced in South Korea. If a South Korean automaker were to take over these prestigious brands, it would undoubtedly spark intense discussions among car enthusiasts. While this scenario remains hypothetical, a similar situation nearly unfolded in the past.

In 2007, during the financial turmoil following the subprime mortgage crisis, Ford sought to sell its then-subsidiary Volvo. At that time, Hyundai Motor Group was considered a strong candidate for the acquisition. However, Hyundai expressed little interest, and the deal ultimately fell through when China’s Zhejiang Geely Holding Group purchased Volvo in 2010. Recently, there have been whispers that a similar opportunity could arise again concerning Lamborghini and Bentley.

The Ongoing Fallout from Dieselgate
Unbearable Penalties and Loans

The Volkswagen Group is facing significant challenges, reporting an 11% decline in operating profit for the first half of 2024 compared to the previous year. On September 2, 2024, the company announced plans to close one finished vehicle plant and one parts facility in Germany—a move unprecedented for the world’s second-largest automaker.

Industry experts attribute these difficulties to the lingering effects of the Dieselgate scandal, which erupted in 2015. The fallout from the scandal has cost Volkswagen more than $7.5 billion in fines and recall expenses. This financial burden has strained the company’s cash flow and could necessitate large-scale loans. If Volkswagen cannot secure the necessary financing, it may be forced to divest some of its assets to stabilize its operations.

Three Brands Identified as Potential Sales Candidates
Hyundai Likely Has No Interest?

The global automotive industry speculates that the Volkswagen Group may seek to sell its supercar brand Lamborghini, luxury brand Bentley, and motorcycle brand Ducati. In light of this, the South Korean securities sector is considering the possibility that Hyundai Motor Group might acquire one or more of these brands to enhance its own brand image.

However, Hyundai has shown a preference for developing its own brand identity rather than acquiring external brands, as demonstrated in the case of Volvo. This approach is viewed as a more reliable method for establishing brand recognition and can be more profitable in the long run. Consequently, even if Volkswagen proceeds with the sale of these brands, the likelihood that Hyundai will express interest appears to be diminishing.

What Are the Advantages of Acquiring These Brands?
Even if Hyundai Pursues It, Implementation Won’t Be Easy

Some analysts argue that the current situation could present a significant opportunity, especially as Hyundai Motor Group focuses on bolstering its Genesis brand. In the South Korean market, Genesis holds a position comparable to luxury giants like Mercedes-Benz, BMW, and Lexus. While it may not yet enjoy the same recognition in Europe—considered the home of premium brands—incorporating Bentley under the Genesis umbrella could enhance its brand value and leverage its technological capabilities. Additionally, Lamborghini could be integrated into Hyundai’s high-performance division, N.

On another note, the Volkswagen Group has secured approximately $22 billion in loans from 13 banks. The next step involves issuing bonds to raise further funds in the coming months. Should any obstacles arise at this stage, Volkswagen has reportedly agreed to sell assets equivalent to the loan amount. While they officially claim there are no ongoing discussions about asset sales, should Hyundai Motor Group express interest in acquiring Lamborghini or Bentley, executing such a deal could be challenging. The Chinese automotive industry, backed by significant capital, will likely pursue these brands.