Porsche CEO says VW can stand up to Toyota

[phaeton]

“We believe that if anybody can stand up to Toyota, it is Volkswagen,” the chairman and chief executive of Porsche, Wendelin Wiedeking, said at a meeting that was supposed to be about the performance of his company.

read more http://www.nytimes.com/2006/12/07/automobiles/07porsche.html?ref=business

 

[Yperion]

With Ford and GM at the edge of bunkruptcy only VW can rival Toyota. I just hope they don't sacrifice build quality and lower it down to Toyota levels.

 

[marcei]

“We believe that if anybody can stand up to Toyota, it is Volkswagen,” the chairman and chief executive of Porsche, Wendelin Wiedeking, said at a meeting that was supposed to be about the performance of his company.

read more http://www.nytimes.com/2006/12/07/automobiles/07porsche.html?ref=business

Now it's becoming more clear, what Piëch/Porsche/Wiedeking targets are. At first, when Porsche acquired ~ 18% , they sayed it's only a strategic investment. Meanwhile, we are getting a bigger picture (thanks for the link)

 

[Yperion]

Welcome to the forum marcei.

It's clear that Piech wants to protect the legacy of his grandfather by uniting Porsche and VW. Without the law protecting the share percentage, VW would had been vulnerable to a takeover but now with Porsche in control the future is secured.

 

[Mr. M]

Now it's becoming more clear, what Piëch/Porsche/Wiedeking targets are. At first, when Porsche acquired ~ 18% , they sayed it's only a strategic investment. Meanwhile, we are getting a bigger picture (thanks for the link)

What puzzles me is that Porsche may be hurting itself in the long run with model overlaps. If it's a merger Porsche may stand to gain by sharing parts (most importantly, DSG technology & maybe mass-production techniques for high-volume units like the upcoming Panamera) but will this offset potential conflicts of interests from a merger?

 

[Choleric]

What puzzles me is that Porsche may be hurting itself in the long run with model overlaps. If it's a merger Porsche may stand to gain by sharing parts (most importantly, DSG technology & maybe mass-production techniques for high-volume units like the upcoming Panamera) but will this offset potential conflicts of interests from a merger?

Conflict of interest would be my worry too, you already have Audi having to limit itself with Lamborghini in the picture.

 

[marcei]

What puzzles me is that Porsche may be hurting itself in the long run with model overlaps. If it's a merger Porsche may stand to gain by sharing parts (most importantly, DSG technology & maybe mass-production techniques for high-volume units like the upcoming Panamera) but will this offset potential conflicts of interests from a merger?

I wouldn't care too much about it. The PWW gang (Piech, his budy Winterkorn & Wiedeking ) are having a big plan for the next 2/3/5 years, that's for shure...

1. Getting control over the board
2. establish the right people on the right places
3. disempower institutions which prevent them to adopt new strategies
4. expose VW capabilties e.g. with the help of Porsche (Engineering/Consulting), if it isn't sleeping already within VW...

As a result, we have a fine ROI for Porsche which allows them to stay cool in the luxury segment and a stronger "VAG" group.

and YANNIS: thanks for the welcome

 

[Mr. M]

I wouldn't care too much about it. The PWW gang (Piech, his budy Winterkorn & Wiedeking ) are having a big plan for the next 2/3/5 years, that's for shure...

1. Getting control over the board
2. establish the right people on the right places
3. disempower institutions which prevent them to adopt new strategies
4. expose VW capabilties e.g. with the help of Porsche (Engineering/Consulting), if it isn't sleeping already within VW...

As a result, we have a fine ROI for Porsche which allows them to stay cool in the luxury segment and a stronger "VAG" group.

and YANNIS: thanks for the welcome

Pardon my manners. Welcome as well.

What you said certainly makes me feel much more confident this might just pull through - a win-win situation for VW and Porsche. If that could happen, wow...

 

[EnI]

At its annual news conference in Stuttgart on Wednesday, Porsche acted like it already was calling the shots on Volkswagen.

More...

In German business circles, Porsche's creeping takeover has become a riveting drama. Wiedeking calls it a David and Goliath tale - somewhat implausibly, given Volkswagen's frailties.
Certainly, it brings together two starkly different brands - the utilitarian "people's car" and the ultimate rich man's toy - that nevertheless share a common history. Ferdinand Porsche, the patriarch of the sports- car dynasty, designed the Volkswagen Beetle for Hitler.

It also has political and legal ramifications, since Volkswagen is now protected from a full takeover by a German law that bars any investor from holding more than 20 percent of the shareholder vote
Wiedeking said, however, that he expected a European court to strike down the law. This would strengthen Porsche's hand relative to Volkswagen's other principal shareholder, the state of Lower Saxony, which owns approximately 20 percent and has resisted Porsche's growing influence. The European Court of Justice is scheduled to consider a challenge to the law next Tuesday, and while it is not likely to act then, legal experts expect a ruling within the next year. If the law is struck down, analysts predicted, Porsche will move quickly to buy Volkswagen. Under German law, a company that owns more than 30 percent of another company's shares must make an offer.

Last month, Porsche said it would ask its shareholders for authority to issue as many as 8.75 million new shares, which it could use to finance a major acquisition.
"Nobody knows what else they would do with all that money," said Ferdinand Dudenhöffer, the director of the Center for Automotive Research in Gelsenkirchen.

Wiedeking said a takeover was not in Porsche's current plans, but he did not rule it out in the future.
"Like in a game of chess, we do not know the moves the other players intend to make," he said. "And to be taken seriously by all the other players, we need to have an appropriate level of approved capital."

This story is far from the end ...


PS: Price of 1 Porsche share is cca €900. So 8.75 million new shares multiplied by €900 = 7.875 billion euros (10.2 billion dollars). Porsche AG is definitely up to something. And if EU court rules in favor of Porsche, PAG will definitely acquire WAG (otherwise VAG could be a target of a hostile takeover). We are definitely going to get PWAG (PorscheVolkswagen AG) in the future.

 

[Imhotep Evil]

It will simply be Porsche AG.

After WWII the allies made sure that F. Porsche would loose control of KDF/VW and was left with the pocket Porsche company witch didn't really had a factory (first Porsches were build in some swiss town I belive, or was it austrian ?!) or a car (the 356/1 was a Bettle).

Just look how things are turning out now.

 

[Deleted member 25]

Actually, Honda and Renault Nissan are also great challengers for toyota.

 

[phaeton]

I wouldn't care too much about it. The PWW gang (Piech, his budy Winterkorn & Wiedeking ) are having a big plan for the next 2/3/5 years, that's for shure...

1. Getting control over the board
2. establish the right people on the right places
3. disempower institutions which prevent them to adopt new strategies
4. expose VW capabilties e.g. with the help of Porsche (Engineering/Consulting), if it isn't sleeping already within VW...

As a result, we have a fine ROI for Porsche which allows them to stay cool in the luxury segment and a stronger "VAG" group.

and YANNIS: thanks for the welcome

Welcome Marcei

1. Getting control over the board
Will Lower Saxony Goverment really give in so easily ?
3. disempower institutions which prevent them to adopt new strategies
Again Lower Saxony Gov. will have a say.

I have read Christian Wulff PM (VW Board Member) for Lower Saxony has not had as much sway in recent times due to his ambitions to run as Chancellor in the future, but Lower Saxony Goverment does not really agree with Dr. Piech, they were supporters for Dr. Pischetrieder so will the Goverment affect Porsche's future influence in anyway ?

 

[marcei]

Welcome Marcei

1. Getting control over the board
Will Lower Saxony Goverment really give in so easily ?
3. disempower institutions which prevent them to adopt new strategies
Again Lower Saxony Gov. will have a say.

I have read Christian Wulff PM (VW Board Member) for Lower Saxony has not had as much sway in recent times due to his ambitions to run as Chancellor in the future, but Lower Saxony Goverment does not really agree with Dr. Piech, they were supporters for Dr. Pischetrieder so will the Goverment affect Porsche's future influence in anyway ?

Thanks for the welcome

You are well informed . Well, if Porsche will get a third place in the supervisory board (assuming they will raise their stake up to 30% (minus one share) and the VW Law will be terminated by the EU, than we have a new situation. I don't believe that Porsche will aquire stakes above 30%. That would be too much, even for Porsche. But who knows...

 

[EnI]

Well, if Porsche will get a third place in the supervisory board (assuming they will raise their stake up to 30% (minus one share) and the VW Law will be terminated by the EU, than we have a new situation. I don't believe that Porsche will aquire stakes above 30%. That would be too much, even for Porsche. But who knows...

If the law is terminated by EU court than anyone will have a chance to acquire VW. And for such situation Porsche should prepared, fully equipped & on stand-by. VW is strategically important to Porsche: PAG using VAGs development / production facilities, common purchasing, etc.

Car industry is in a difficult position right now. Raw material prices are high, energy prices are high, workers want higher salaries, development prices are high etc.

Especially premium brands have to spend A LOT of money on R&D - to come with high-end tech & so add some added value to the product (beside design, image etc).: with using premium materials, methods, solutions & tech. And with the energy crisis we are heading in ... With bloody needed technological brake through (hybrids, hydrogen, etc).

Times of boutique car makers are over. Small fishes will not survive. Only big ones will be able to swim around.

And Porsche is too small to generate enough revenues & profit to follow big premium brands like MB, BMW, Audi & Lexus in their R&D spendings. Some of these brands are already parts of a corporations (DCX, VAG, Toyota), while some are trying eagerly to grow & to become big enough (eg. BMW - therefor all the model expansion lately).

So Porsche need to add more vehicles to model line -> more sales -> more revenue -> more profit. But expansion means building new capacities & facilities, more R&D spendings, more workers ... And here PAG can save some money if they have a strong business partner - like ie. VAG. They cooperate with VAG on Cayenne, upcoming Hybrid solution, and they will do it (have to do it) in the future. So, to assure such strategic cooperation, Porsche should take control over the VAG: one way or another. And the safest way is to acquire a stake big enough to take control. Right now 30% - 1 share is enough, but for a safer future a full control is the only acceptable option.

That will be a major shake-up. The question is who is going to buy new Porsche shares (without voting rights!), without any guarantee of a higher dividend in a short time. I can't see any rational investors who are ready to risk. Except one. Bundesland Lower Saxony. Will Porsche / Piech family make a deal with Lower Saxony - changing LS's stake in VAG for a smaller yet still more profitable one in PAG? This is the question that bothers me ...

Win - win situation ...

I'm sure Porsche already have some great ideas & very concrete plans what to do with VAG & its brands ...

Toyota watch out!

 

[far2000]

Vw need 2 sought there reliability and Quality Problems and leARN from Toyota how 2 make decent profits....