Eicher ready to bid up to $2 billion for Ducati - paper

BANGALORE/BERLIN (Reuters) - India's Eicher Motors is set to offer $1.8 billion-$2 billion for Italian motorcycle manufacturer Ducati, the Economic Times newspaper reported on Thursday, although German owner Volkswagen has put the sale process on hold, sources have said.

Volkswagen put Ducati up for sale in April to help fund a strategic overhaul in the wake of the emissions scandal, but it has faced resistance from German trade unions and internal rifts over the group's strategy.

Earlier this week, Volkswagen instructed five potential buyers to hold off making binding bids, sources familiar with the auction told Reuters.

Mumbai-based Eicher, which makes Royal Enfield motorbikes, is believed to be the only Asian firm left in the auction and the Economic Times quoted unnamed sources saying it is currently finalising terms ahead of the original bid deadline of end-September.(http://bit.ly/2eHOiI5)

Bologna-based Ducati is controlled by VW's Audi division, which along with VW declined to comment.

Eicher, whose shares reached a record high, was not available for comment.

UNION OPPOSITION

Sources close to labour representatives at Audi and VW, repeated on Thursday that trade unions remain opposed to the sale of Ducati, which has also raised interest from U.S. motorcycle maker Harley-Davidson, sources have said.

German labour unions are keen to avoid disruptions in the workforce ahead of next year's works council elections at VW, two sources said.

Separately, despite the growing costs for the diesel emissions scandal and shift to electric cars, trade unions believe there is no financial need for VW and Audi to sell Ducati given the group's strong financial results.

Under Audi's watch, revenue at Ducati rose to 593 million euros ($712 million) in 2016 from 450 million euros in 2013, with deliveries up 25 percent to 55,451 motorbikes, according to Audi data.

VW's head of strategy, Thomas Sedran, told Reuters last month that the German group was in no hurry to find a new owner for Ducati.

Meanwhile, Eicher shares closed up 2.4 percent having earlier risen as much as 3.9 pct on the bid report.

The Eicher Group designs, develops and manufactures trucks buses and motorcycles and their components.

"Ducati being a well-renowned brand will help Eicher in terms of design and technology, which in turn will help expand the Royal Enfield product portfolio in the years to come," said Basudeb Banerjee, analyst at Mumbai's Antique Stockbroking.

($1 = 0.8328 euros)

(Reporting by Aby Jose Koilparambil and Tanvi Mehta in Bengaluru and Andreas Cremer in Berlin; Editing by Clara Ferreira Marques and Elaine Hardcastle)