Thursday, April 23, 2009

"Porsche is running into financial trouble...."

Porsche Automobil Holding SE (PAH3.XE) said Thursday it has no plans to sell its sportscar operations to Volkswagen AG (VOW.XE), dismissing a media report published earlier Thursday.

"We resolutely dismiss the speculation, which is currently being leaked on purpose," a spokesman for Porsche said.

The Financial Times reported earlier Thursday that Volkswagen could take over Porsche's sports car unit, citing people close to the situation. The move would turn the tables on Porsche, which boosted its Volkswagen stake to a majority holding in January.

At Thursday's shareholder meeting, Volkswagen Chief Executive Martin Winterkorn is facing questions on Porsche's future role at VW after analysts voiced concerns that Porsche is running into financial trouble, squeezed by mounting net debt of EUR9 billion after raising its VW stake to 51%.

The closely-held firm has repeatedly denied that it faces financial difficulties.

Source - WallStreetJournal

Porsche, Piech Families Said to Sell Car Assets to VW




The Porsche and Piech families plan to sell their main car assets to Volkswagen AG under a plan that would tighten Porsche SE’s grip on Europe’s biggest automaker, according to two people familiar with the matter.

The families, which control at least 51 percent of Wolfsburg, Germany-based VW, intend to sell the Austrian Porsche Holding GmbH unit and the Porsche AG automotive division to VW in return for cash and VW shares, said the people, who declined to be identified because the plan is confidential. As part of the transaction, Porsche SE will issue new shares, a portion of which may be sold to external investors, they said. The plan is backed by VW, the people said.

The asset sale would allow Porsche SE to achieve its aim for greater control of VW, Europe’s largest carmaker, while preserving cash and giving it funds to repay debt, three people familiar with the situation said this month. Porsche, based in Stuttgart, Germany, is struggling to raise the financing needed to reach its goal of obtaining 75 percent of VW, they said.

“One driving motivation is that Volkswagen, being the largest volume producer in the European space, has tremendous cost efficiency that could be married to Porsche’s discipline and lean production capacity,” Stephen Pope, chief global strategist at Cantor Fitzgerald in London, said by telephone.

Frank Gaube, a spokesman for Porsche, and Michael Brendel, a VW spokesman, declined to comment.

Shares Jump

Porsche jumped as much as 3.99 euros, or 8.1 percent, to 53 euros and traded at 51.88 euros as of 2:01 p.m. in Frankfurt, giving the company a market value of 9.05 billion euros. Volkswagen dropped 8.03 euros, or 3.4 percent, to 230.46 euros.

A transaction would result in the creation of a major automotive holding company spanning cars, trucks and luxury vehicles, the people said earlier this month.

The Porsche and Piech families together control half of Porsche SE. Porsche AG is the operating unit that’s the maker of the 911 sports car and competes with Bayerische Motoren Werke AG. Austrian Porsche Holding is Porsche’s eastern European distribution division.

Porsche has accumulated Volkswagen stock since 2005 to protect ties to its largest supplier. Volkswagen provides Porsche with parts and the companies cooperate in building sport-utility vehicles. Volkswagen Chief Executive Officer Martin Winterkorn said today that he is “confident” that deepening ties with Porsche will let the companies increase profitability and market share.

‘Enormous Potential’

“We’re both capable of forming the center of strength in international carmaking,” Winterkorn said at VW’s annual shareholders’ meeting in Hamburg. “This alliance has enormous potential in technological and economic terms.”

Shrinking European and U.S. car markets have prompted Volkswagen to scale back production, reduce employee hours and eliminate its temporary workforce to stem declines in profit. The carmaker, which reported a 74 percent drop in first-quarter net income yesterday, will be profitable this year, Winterkorn said, reiterating an earlier forecast.

Porsche Chief Executive Officer Wendelin Wiedeking has said Volkswagen offers a “gold mine” of saving potential that the carmaker can tap to boost profits and that there will be no “sacred cows” at VW.

Volkswagen and Porsche already work together to build sport-utility vehicles and Porsche has tapped VW to assemble its Panamera four-person sedan. The companies also cooperate on SUVs such as Touareg, Cayenne and Audi’s Q7.

Volkswagen’s ties to Porsche go back to the company’s creation under the Nazi regime of Adolf Hitler in the 1930s. Ferdinand Porsche, the grandfather of Volkswagen’s current chairman Ferdinand Piech, was the company’s first leader. Ferdinand Piech’s father, Anton Piech, married Porsche’s daughter and became Volkswagen’s director. The extended Porsche- Piech family controls all of the sports-car maker’s voting shares.

Source - Bloomberg

Sunday, April 19, 2009

Audi Celebrates Best Month Ever in China

Year-on-year sales growth of seven percent in March
Audi A4L makes a very successful start on the market
Audi will unveil the new generation Audi Q7 at the “Auto Shanghai 2009” show

AUDI AG achieved its best monthly results yet for the Chinese market in March 2009. Including Hong Kong, 11,848 vehicles were sold – a seven-percent increase over March 2008. This record performance is due in particular to the long-wheelbase version of the Audi A4, produced exclusively for the Chinese market and available since January 2009.

“We are pleased with this healthy growth in China, our second home market,” says Rupert Stadler, Chairman of the Board of Management of AUDI AG. “These successful sales figures make us confident about the rest of the year.”

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Volkswagen First-Quarter Sales Fall 11% on U.S., Audi Declines

Shrinking European and U.S. car markets have prompted Volkswagen and other automakers to scale back production and eliminate temporary jobs. With vehicle deliveries projected to drop 10 percent this year from 2008’s record of 6.23 million because of the recession, Volkswagen is bracing for a first- quarter loss.

The sales drop was held back by gains in countries where governments are offering incentives for car purchases, and the introduction of new models will allow Volkswagen to “perform significantly better than the competition in 2009,” Detlef Wittig, the company’s sales chief, said in the statement.

Declines in European car-industry sales, including deliveries by PSA Peugeot Citroen, the region’s second-biggest automaker, and Fiat SpA, Italy’s biggest, slowed to 9 percent in March, the smallest drop in six months, as incentives encouraged trade-ins, the European Automobile Manufacturers’ Association said yesterday.

Volkswagen-brand sales fell to 876,000 cars and SUVs, the company said today. Global deliveries at the Audi luxury division fell 11 percent in March to 90,400 vehicles, the unit said on April 6. Group figures also include the Skoda, Seat, Bentley, Bugatti, Lamborghini car divisions, the commercial- vehicles unit and, as of March, Scania AB trucks.

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