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Porsche to tread the straight and narrow
Porsche increases its stake in VW to protect its interests - not to cross-fertilise
7 Nov 2005
DO NOT expect Porsche engines to be popping up in Volkswagens at any time in the future.
That is the message from Porsche Cars Australia managing director, Michael Winkler, commenting on Porsche’s decision late last month to increase its share in Volkswagen AG to 20 per cent.
According to Mr Winkler, Porsche’s decision to lift its stake in VW from five per cent was designed to protect a hostile takeover of the VW brand – a threat he described as a "real possibility".
Under Germany’s "Volkswagen Law", which prevents any one single shareholder from exercising more than 20 per cent of voting rights, it cannot prevent a group of investors acting in concert to effectively launch a hostile takeover of the company.
Porsche’s fear was that a group of investment bankers would move on VW and threaten Porsche’s business and engineering ties, which form a big part of its external business.
The stake, said to have cost Porsche more than $US3 billion ($A4 billion), makes Porsche the largest of VW’s shareholders. It also means it can nominate three directors on the 20-member VW supervisory board.
However, Mr Winkler believes Porsche’s core business will remain largely the same and that the question of Porsche engines being put into VWs was academic.
"But who can predict the future?" he said. "All I can say right now is that we’ve made a very clear statement that Porsche will remain Porsche.
"The keen sense of independence we have as a company is not going to change the least bit with this investment.
"We are investing in something else – to some degree – to make sure that doesn’t disappear through corporate raider in order to still be able to use those synergies we have built up through the years with our business relationships."Mr Winkler also did not foresee problems arising with Porsche selling its engineering know-how to other car companies.
"I think time will tell on that," he said. "I’d say that our guys who have looked at this would say that the trade-offs would be such that the benefits of this investment would far outweigh those sort of potential negative issues.
"If, at a minimum, all we do is maintain the level of co-operation we have today through contractual arrangements and simply secure those by making sure that VW doesn’t get broken up, that already is a huge benefit."Conversely, VW’s chairman Dr Wolfgang Bernhard told Australian media in Sydney late last month that the VW board was committed to 100 per cent of shareholders and that the sportscar maker would not get any "special treatment".
"Porsche will have no influence on (our) new model strategy", he said, adding that the relationship is "not exclusive" and that VW was free to liaise with other companies.
Although the VW-Porsche deal is on Mr Winkler’s radar, his more acute focus is Australia and the addition of the all-wheel drive 911 models launched last week, the February arrival of the Boxster-based Cayman and arrival mid-2006 of the 911 GT3 and Turbo.
He expects to sell between 100 and 150 Caymans a year, with many buyers moving up from Boxster. He also expected there would be little, if any, cannibalisation from the 911.
"The 911 continues to be the icon for the brand," he said. "Certainly, the research we’ve done prior to the launch of Cayman would (however) suggest that we will get some cannibalisation from moving upward from Boxster."Mr Winkler believes there will also be some Mercedes SLK and BMW Z4 buyers who will turn to Cayman.
What's coming from Porsche:Cayman S - February 2006
911 GT3 - June 2006
911 Turbo - June 2006
Cayenne facelift - Early 2007
Panamera - 2009
Cayenne hybrid - 2010
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