Volkswagen Denies Ducati Sale as Recall Bill and India Tax Fight Converge on a Stock Down 31%

VW quashes Ducati disposal talk as a steering recall of up to 2.16 million vehicles adds pressure after its full-year margin target was cut to 1%.

Volkswagen has moved to quash speculation that it is preparing to offload Ducati, with Italian industry minister Adolfo Urso telling reporters after a Friday meeting with company representatives that no disposal of the motorcycle brand is on the table. According to the ministry, investment and product plans for Ducati are proceeding as scheduled, and no decision has been taken on any change to its ownership structure.

The denial lands as the Wolfsburg group juggles a far heavier set of operational and financial headaches, from a mass recall in its home market to a stalled joint-venture negotiation in India and a restructuring programme that has yet to be fully mapped out.

A recall of up to 2.16 million vehicles

News broke on Friday that Volkswagen must bring in close to 900,000 vehicles in Germany over possible corrosion on a steering mounting screw. The Tiguan, Touran, Golf, Golf Variant and Caddy are affected, spanning eleven production years. Globally, as many as 2,159,054 vehicles from the core brand could be caught up in the campaign.

A spokesperson stressed there is no acute danger to drivers, though a steering failure cannot be technically ruled out. Fixing the issue will tie up considerable capacity across the service and workshop network — capacity that now has to be found on top of everything else.

Margin guidance leaves almost no room for error

The timing could hardly be worse. Three weeks ago the company cut its full-year return target to a maximum of one percent, a revision driven largely by ten billion euros in special items but one that also laid bare how thin the buffer for unexpected charges has become. Even day-to-day operations are lacking momentum.

The extra logistical burden of inspecting more than two million screw connections threatens to erode what profitability remains. Should workshop costs widen, even the bare-minimum goal of breaking even in the operating segment would come under strain. Investors will be watching whether material expenses in the current quarter push already-depressed margins lower still — every additional euro of unplanned spending hits the group income statement directly.

Ducati denial, China pre-sales and an Indian tax standoff

Beyond the recall, Reuters reported on Friday that talks are pending in Germany over job cuts and plant closures, with open questions on the US strategy still to be resolved as part of the restructuring. The report centred on CEO Oliver Blume's turnaround plan.

In China, Volkswagen opened pre-sales on Thursday for its second model co-developed with Xpeng, with pricing starting at 199,900 yuan and an official sales launch set for the end of October.

In India, the group is negotiating a joint venture for its passenger car business, and Reuters, citing Bloomberg on Thursday, reported that the JSW Group wants Volkswagen to absorb an Indian tax back-demand of $1.4 billion — leaving the treatment of that liability as one of the sticking points in the talks.

Meanwhile, subsidiary MOIA America began passenger robotaxi rides on Thursday in Lake Nona, Orlando, together with Beep. Reuters characterised the move as the start of the unit's first passenger operation in the United States.

Where the stock stands

The shares changed hands at 72.18 euros on Friday, up 0.4 percent on the day but down 31 percent since the start of the year. They sit just 3.3 percent above their 52-week low of 69.20 euros, putting the 70-euro mark back within uncomfortable reach. Sentiment is fragile, and the recall has done nothing to help.

Two views on what comes next

The bull case rests on a swift, low-drama resolution of the technical defect. If franchised workshops can process the affected vehicles without major material or reputational damage, the market could quickly lose interest — the models involved are among the group's most established volume sellers, after all.

There are cautious bright spots on the product side too. The new ID. Polo won its budget-class category at the German Car of the Year 2027 awards on 22 September. If Volkswagen can use models like this to return to competitive pricing, earnings potential reopens. Among analysts, Berenberg kept its "Buy" rating and 100-euro price target after a presentation by the finance chief on 22 September, banking on stabilising model cycles and successful cost control.

The bear case sees multiple operational fronts deteriorating at once. Alongside the costly recalls, competition from overseas is biting harder, particularly in Volkswagen's European home market, where new entrants are pushing aggressive pricing into segments the group has long dominated. Bernstein Research analyst Stephen Reitman pointed on Wednesday to intensifying competition from Chinese carmakers in Europe, maintaining a "Market-Perform" rating with a 100-euro target and singling out subsidiary Seat as a structurally weak brand. Add further recall waves to those market-share losses and sustained margin compression becomes a real risk; if volume-brand sales keep eroding, the group stands to lose more ground in the price-sensitive mass segment.

Dates that matter

As long as support holds near the annual low of just under 69 euros, the chance of a technical stabilisation survives. If that chart level gives way under the weight of rising repair costs or weaker sales, a fresh slide towards new lows beckons.

A first read on institutional mood comes as soon as Tuesday, when Volkswagen attends the BNPP IR Days in Madrid, where big investors are likely to press management on the financial scale of the workshop campaign and the restructuring. The real test of operating health follows on 29 October, when the group publishes its interim report for January to September 2026 — the first hard evidence of how deeply the latest charges have cut into the numbers.