Thursday 20th August 2009

VW-Porsche Will Save £600m Says VW Boss

Merger will bring huge savings, but not until Porsche sorts out its massive debts

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VW CEO Winterkorn and chariman Piech

Volkswagen's merger with Porsche will generate a combined 700 million euros (£603m) in savings every year according to VW group CEO Martin Winterkorn. In response to criticism from analysts that the projections were too ambitious, the VW boss has reaffirmed the expected savings for both the sports car maker and VW were 'very realistic'.

We hope this doesn't mean British Leyland-style badge engineering or too much parts sharing - there's enough of that already with the Cayenne and Touareg SUVs - although we definitely wouldn't mind a Panamera with a Lamborghin/Audi-sourced V10...

The financial troubles (read 'massive debt') of Porsche SE - the parent company of the sports car business - means that VW cannot fully integrate Porsche into its empire immediately, although Hans Dieter Poetsch, VW's Chief Financial Officer, told a German newspaper that the merger could be sped up if the economic climate were to improve sufficiently.

At least the car side of things is going well

VW is already exerting its influence on Porsche, however. Having already deposed Porsche's CEO and CFO, VW's senior executives will, from September, also be in charge of affairs at Porsche.

Despite Porsche SE's financial difficulties, which include a 5 billion euro (£4.3bn) loss, the sports car side of the business - Porsche AG - remains healthy.

Porsche AG's new CEO, Michael Macht, even suggested that Porsche could boost annual sales to around 150,000 units if they added a fifth model line. Macht would not comment further, but this could mean that a front-engined V8 coupe - the oft-rumoured spiritual successor to the 928 - is close to becoming a reality.

[threespires]

I'm about to order my Porsche Polo, get in first I say.

For my business I've ordered 2 x Porsche Caddy Vans and the reps will have Porsche Passats.

[ColonelKurtz]

Well, I'm looking forward to ordering the Skoda 911 & Seat Cayman.......

[trikezx6r]

What about the Porsche Touareg..Oh they already build the Cayenne

[threespires]

trikezx6r said:

What about the Porsche Touareg..Oh they already build the Cayenne

LOL

[wab172uk]

Hmmm, I'm not sure. What do I order?

Golf GT3, or go hardcore and get myself the Golf GT3 RS?

Decisions, decisions.

[Ex Boy Racer]

fantastic! when all of these savings are passed on, we can all afford a 911!

[G4HKS]

Ex Boy Racer said:

fantastic! when all of these savings are passed on, we can all afford a 911!

Yeh, dream on!

[Lancs Jag Boy]

How long before 911 has Audi V8 turbo, because the scale of economy is too big to resist?

I'm sure I will no doubt get loads of replies about how it's not possible to get V8 into 911, yeah, yeah, yeah, whatever. Money talks, they will get the crowbar out and lever the bugger in if it saves some money.

For those who said they would never buy a water cooled 911, this will too much to live with. I can see the used ads in 2014 now. "2010 Porsche 911, one owner, pre-VW model, a wonderful example of a true Porsche"

[jamiesim]

VW - please leave Porsche alone to do what it does best and dont try to bdise the brand...

You have audi for that!

[BBS-LM]

Will this turn Porsche into FWD cars?

Edited by BBS-LM on Thursday 20th August 12:59

Edited by BBS-LM on Thursday 20th August 12:59

[RichardR]

With Wiedeking gone and more influence from VW, maybe Porsche won't be such a late adopter of technology in future.

[paranha]

Perhaps VW can get Porsche management to re-invent customer relations and treat their customers with some respect over the complaints, instead of biting the hand that feeds them.

[mark3man]

Lancs Jag Boy said:

For those who said they would never buy a water cooled 911, this will too much to live with. I can see the used ads in 2014 now. "2010 Porsche 911, one owner, pre-VW model, a wonderful example of a true Porsche"

From the deja-view (!) the takeover of Astons by Ford didn't create a Fiesta Vantage or a Virage Ghia. It actually resurrected the marque.
It didn't stop people saying that Astons hadn't built a decent car since 1925/1939/1958/1972/1987, depending on their personal taste.
Whilst Porsche AG was and is successful the daft financial shenanigans of the holding company have caused what is really a forced sale of the AG.
The economies will be from getting the most use as they can out of the expensive bits, the detailled designs and the tooling - same as any engineering business needs to. An Audi based, 928 sort of car seems on the cards. Wouldn't be a bad car or a bad idea, would it ?

[barks]

It was the 944 that helped porsche out of previous financial trouble wasnt it. Maybe this front engined coupe is an attmempt at somthing similar.

[goodhand]

Perhaps I've over-simplified this in my mind, but I understood the reason Porsche SE were in such debt, was because of the amount of cash they borrowed to purchase 50+% of VW shares.

Surely, when VW acquire Porsche, these sharess will effectively be 'bought back', freeing up enough cash to pay back these loans?

Edited by goodhand on Thursday 20th August 16:22

[barks]

Wouldnt the cash Porsche paid for the 50% stake in VW have gone too 3rd parties who previously owned those shares. The cash didnt go into VW, unless by some roundabout route of share ownership.

[Uncle Fester]

Such savings are usually achieved by cutting staff.

The question is will those cut be engineers or accountants.

I just hope we don’t end up with a cheap FWD car with a rear engine.

[delays]

Plus, with VW in charge that does mean that Piech is now in charge also.

Piech being the man who gave us the Porsche 917, Audi Quattro and Bugatti Veyron whilst being a fierce ambassador for "halo models" - witness the loss-making Veyron and Phaeton hyper-exec, which he green-lighted simply because he could. He even owns roughly 13% of Porsche personally, and so in every sense the company is his baby. This contrasts with Wiedeking, who ruled out any project which didn't turn a profit.

Will we see a return to Porsche of old? Slightly mad, putting extreme engineering before costs, which given the merger will be soaked up by profit-making VAG companies?

Edited by delays on Thursday 20th August 18:00

[k-ink]

"700 million euros (£603m) in savings "

[BBS-LM]

k-ink said:

"700 million euros (£603m) in savings "

hahahaha