By William Boston

BERLIN -- Volkswagen AG is in talks about a potential sale of its Bugatti luxury sport car brand, a move that could signal a broader realignment of the German car maker's vast stable of automotive brands.

VW, whose brands range from Audi to Porsche and Skoda to Lamborghini, is discussing the possible divestment with Croatia's Rimac Automobili, a person familiar with the talks said, stressing that there was no guarantee these would lead to a deal.

The existence of the talks, which were first reported by Germany's Manager Magazin, suggests that the world's biggest car maker by sales is moving beyond efforts to preserve its cash during the pandemic and exploring more strategic questions, such as the reordering of its vast portfolio of assets, many of which the company has discussed selling in recent years.

While the talks are in early stages, Volkswagen appears willing to sell and the company holds Rimac and its founder, Mate Rimac, in high regard, the person said.

Volkswagen and Rimac declined to comment.

Rimac is an-electric performance-car maker near Zagreb, Croatia, that provides technology for high-performance electric cars to auto makers such as Volkswagen's Porsche, which owns 15.5% of Rimac, Aston Martin, Pininfarina, and Koenigsegg.

Mr. Rimac founded his company in his garage in 2009, when he began developing an ultrafast-performance electric car.

Volkswagen's late patriarch Ferdinand Piech purchased the century-old Bugatti trademark in 1998 for an undisclosed price, three years after the company had gone bust and ceased production. He also bought Lamborghini the same year, part of a strategy to build a stall of luxury brands to enable Volkswagen to compete directly against German rivals BMW AG and Daimler AG's Mercedes-Benz.

Last year, Bugatti presented at the Geneva Motor Show the most expensive sports car ever built, the Bugatti La Voiture Noire, a 1,500 horsepower machine with a top speed of 265 mph that sells for just under $20 million.

The talks show that Volkswagen has revived an appraisal of its portfolio that began in the wake of the diesel emissions scandal and could lead to further disposals as the company adapts to the technological transformations that are affecting the sector globally.

In the past, talks of divestment have met with hostility with workers' representatives, who under Germany's corporation law have a strong say in management decisions through their board seats.

In 2017, Volkswagen was negotiating to sell the Ducati motorcycle brand to Harley-Davidson, but the deal was blocked internally by the labor representatives and the Porsche-Piech family, according to people familiar with the situation at the time.

The family, which owns a controlling stake in Volkswagen, has also been reluctant to jettison assets seen as a cornerstone of Mr. Piech's legacy. But this may be changing.

"The family is not opposed to a sale," the person familiar with the situation said.

High-price auto brands such as Bugatti and Lamborghini provide flair to Volkswagen but aren't thought to do much for the company's bottom line.

Volkswagen doesn't publish revenue or profit figures for Bugatti, Lamborghini or Ducati, but in 2019 Bugatti sold just 82 vehicles, Lamborghini 8,205 and Ducati 53,183, compared with 6.3 million vehicles for Volkswagen's eponymous brand.

Industry analysts and investors have complained for years that Volkswagen's conglomerate structure conceals a lot of the value in its most lucrative brands, such as Porsche. Some investors have urged Volkswagen to group Porsche with the company's luxury brands and spin them off as a separate entity. Volkswagen rejects the idea, citing the synergies it gets across its brands.

Porsche and Audi serve high-end markets and provide hefty returns. Other illustrious brands such as the Ducati motorcycle brand, Bugatti and Lamborghini offer little more than their brand cachet, analysts say, and aren't core business.

"These brands are completely irrelevant in the broader context of VW," said Arndt Ellinghorst, an automotive analyst at Bernstein Research, adding a sale of Bugatti would make no difference to the company. "I'm sure there's some strategic rationale, but for investors it's irrelevant."

Write to William Boston at william.boston@wsj.com

Corrections & Amplifications

This article was corrected at 3:02 p.m. ET because the headline misspelled Croatian.