Porsche to buy Audi, Lamborghini, Bugatti and Bentley?

[Kowalski]

Source: http://www.motorauthority.com/news/n...i-and-bentley/

Porsche has moved to become the largest shareholder of the German giant Volkswagen group, and is now tipped to be attempting to spin-off the Audi brand from the consortium so that the sports carmaker may acquire the luxury brand’s shares by itself. Porsche is understandably being very tight-lipped about the issue, but many analysts have acknowledged the potential that could be gained from such a reorganization.

If the merger occurred, Porsche together with Audi would be able to sell more than a million cars annually, with a higher yield than either Mercedes or BMW. This would leave Volkswagen Group consisting only of VW, Skoda and Seat, which would still maintain an annual output of four million cars but with much lower margins. It would also enable Audi to make the final push to unseat BMW and Mercedes as the premier German carmaker.

The proposal of a restructure is not as far-fetched as it seems. The first steps towards the move have already occurred, with VW Group’s new head, Martin Winterkorn, planning to create a separate group for its premium brands Audi, Bentley, Lamborghini and Bugatti, similar in style to Ford’s Premium Auto Group. VW, Skoda and Seat will remain as its mass market division. Furthermore, Porsche is expected to request a capital increase at the next general meeting in preparation of the possible Audi spin-off.

[DuSpinnst]

That is a very interesting spin on it. I'd have thought that Porsche would have just taken control of VAG outright.

[Quickening]

The connection between all these companies is so odd...

[69Firebird400]

Audi could be in worse hands than Porsche's. As the owner of Audi, would Porsche be willing to spend enough on R&D to keep the models competitive? Seems like pride and bragging rights would incline them to keep Audi competitve with M-B and BMW, and that's a good thing for consumers.

[mgescuro]

I wonder how this would leave VW? VW has some high costs. Would maintaining volume-only brands with lower margins be able to generate the necessary profits needed to maintain VW?

Porsche acquiring Audi, Bugatti, Lamborghini, and Bentley would be interesting. It would be a far more formidable competitior to Ford's PAG. But would Porsche be capable of swallowing those 4 brands whole? Interestingly enough, the PABBL combination has no real overlaps.

[DuSpinnst]

Originally Posted by mgescuro

I wonder how this would leave VW? VW has some high costs. Would maintaining volume-only brands with lower margins be able to generate the necessary profits needed to maintain VW?

Porsche acquiring Audi, Bugatti, Lamborghini, and Bentley would be interesting. It would be a far more formidable competitior to Ford's PAG. But would Porsche be capable of swallowing those 4 brands whole? Interestingly enough, the PABBL combination has no real overlaps.

VW splitting for Audi would do one thing, justify the Phaeton returning to the US market.

[fp115]

For the most part Audi and Porsche already share dealerships around here, so that wouldn't be a problem. I just wonder how it will effect the models.

[mbukukanyau]

I really do not care

[mgescuro]

Originally Posted by DuSpinnst

VW splitting for Audi would do one thing, justify the Phaeton returning to the US market.

What an interesting idea. Justification for it in the US market won't make it any more of a success. It has failed in every single market it sells.

[DuSpinnst]

Originally Posted by mgescuro

What an interesting idea. Justification for it in the US market won't make it any more of a success. It has failed in every single market it sells.

True, but if VW didn't control Audi it would have a legitimate right to have a "Flagship" car.

[jbartley]

trying to understand the relationships between all these companies gives me a headache.

thais basically prevents VW from ever moving upmarket. But it looks like they'll try to make AUDI "everything brand" like BMW is becoming, and MB made the mistake of doing. It will create an interesting brand levels, some odd overlap.

[rsbaker]

Can someone please explain this for me. I always thought Audi Porche and VW were all part of the same company in the first place. They have always had the same or similar platform and many of the same engines. I would much appreciate it someone could clear this up for me.

Sounds like it will be a strong company as long as they can resist the temptation to share technology to cut cost so much that everything starts to look alike.

[ghughes]

You cannot analyze it as we do. The german state govts own a big chunk of Vw and Audi - talk about govt subsidization! They can pretty much do what they want, financially.

[nadepalma]

Originally Posted by mgescuro

I wonder how this would leave VW? VW has some high costs. Would maintaining volume-only brands with lower margins be able to generate the necessary profits needed to maintain VW?

Porsche acquiring Audi, Bugatti, Lamborghini, and Bentley would be interesting. It would be a far more formidable competitior to Ford's PAG. But would Porsche be capable of swallowing those 4 brands whole? Interestingly enough, the PABBL combination has no real overlaps.

You're right that there's no true overlapp with the exception of limited number cars like the Porsche Carrera GT and the higher-priced Lambos. But I'm sure they could find room for it all (if Fiat can afford to bring the Alfa Romeo Competizione 8C to market in limited numbers while competing with higher priced Maserati/Ferrari products then I guess Porsche could do this too).

The only other factor that might interfere is how far Porsche wants to expand the Porsche brand itself (would a sport-sedan step on the toes of the lower-priced Bentley models, etc. ?) and the financial disaster that is Bugatti. If Bugatti does put in a lower priced model (sub $140K is what we're hearing), it would compete with some of the higher-spec 911 models as well as the Gallardo -- does this type of possible cannibalization help the group?

All interesting to ponder no dobut.

But from a strategic perspective, Porsche could do worse than make this type of move.

[Bravada]

The most stupid idea ever. The only reason for Porsche to own all of VAG's luxury brands would be to shut them down to prevent competition. They are already stepping on their toes at VAG, and adding Porsche to the mix makes it even more tight. I'd say it would have made sense for Porsche to actually get rid of all the brands VAG has acquired over the years and keep VW, Audi and Skoda.

But of course business logic is not involved even nearly as much as somebody's political ambitions...