AUDI is set to extend its rivalry with BMW into the motorcycling world if audacious plans to buy Ducati come to fruition.

The German giant is in talks to snap up the ailing Italian motorcycle manufacturer in a deal that would see it go head-to-head with BMW for two-wheeled honours.

Ducati is currently owned by a private equity group but the marque, which has significant debts, is up for sale.

And sources close to the talks claimed this week that the luxury arm of Volkswagen has signed an option that gives it first refusal for Ducati.

Audi's auditors are conducting due diligence checks on Ducati and, if they are happy, a bid is expected soon.

Buying Ducati would be a smart move for the VW Group. Although Ducati is facing tough times its expertise in building small capacity, high power engines would be priceless. Every car manufacturer is under pressure to find new ways of reducing emissions without sacrificing performance. Ducati's technology would add a new technological dimension to Audi's engine programme.

The brand would also be a fine fit with VW's portfolio of halo high performance products which already includes Porsche, Lamborghini, Bentley and Bugatti.

Often referred to as a two-wheeled Ferrari, Ducati's superbike racing-inspired bikes are objects of lust for motorcyclists all over the world. The Bologna-based company, which was founded in 1926, counts Tom Cruise and Brad Pitt among its customers.

Investindustrial, the private equity group which owns Ducati, admitted last month that it was looking for a “world class industrial partner” to take the company forward and fund overseas expansion.

But, according to the Financial Times, Investindustrial is actually looking to sell. The cost is believed to be around £249m, including acquired debt.

Ferdinand Piech, the chairman of VW's supervisory board, has been mulling over acquiring a prestige motorcycle marque for sometime. The group considered reviving the long dormant Horex marque but eventually concluded that, as its last bike was built in 1956, the name lacked brand recognition. Buying Ducati would give VW an instantly recognisable badge.

As long ago as 2008 Piech admitted he had made a mistake not buying Ducati from Cagiva in 1996. Piech said he coveted Ducati's expertise at building racing engines for the road.

Audi's chief rival appears to be the Indian Hero MotorCorp which confirmed this week that it, too, was in talks with Ducati. However, a link up with Audi would almost certainly be the preferred option of Ducati's many fans worldwide.