Tuesday 23rd October 2007

VW Law Ruled Illegal

Ruling allows Porsche to bid to take control

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Another VW for sale today

It looks like VW is about to get a new owner.

According to a press release from the EU courts, the VW Law, which has protected VW from takeovers since 1960, has been ruled as illegal.

The court ruled that the law prevented free movement of capital, and further criticised three key elements of the 47-year old ruling.

They disagreed with the right of the Federal State and Lower Saxony to be able appoint two representatives to the VW supervisory board, on condition that they hold shares in the company.

They also raised concern at the limitation on shareholders voting rights being capped at 20%, even when their shareholding exceeds that percentage.

Finally, they disagreed with the massively high 80% majority required to pass resolutions, which, under the Law on public limited companies, requires only a majority of 75%.

The decision leaves the door open to Porsche CEO Wendelin Weideking’s ambitions, as the Stuttgart marque seeks to grow.

At present, Porsche holds a 31% stake in VW, but those in the industry know predict that they will seek to increase this to 51% over the next couple of years.

[mk1fan]

Not sure if Porsche ownership would be a good thing or a bad thing.

What will happen to Bentley, Lambo, Buggati and the Audi R8?? All of which are potential Porsche sales.

[PhantomPH]

Surely if Porsche own Audi and the R8 is selling mega-lots...affecting Porsche sales, they are still getting the revenue - just from another branch of the main company.

so why would it matter if Porsche owned VW?

[flattotheboards]

PhantomPH said:

Surely if Porsche own Audi and the R8 is selling mega-lots...affecting Porsche sales, they are still getting the revenue - just from another branch of the main company.

so why would it matter if Porsche owned VW?

this would mean then that they woudnt have to make as many 9911s, boxsters and caymans and therefore they may become rarer.i doubt this would happen but it would be good if it did.

[Road_Terrorist]

VAG products have tended compete against each other anyway, I think it's even company policy.

[Frimley111R]

PhantomPH said:

Surely if Porsche own Audi and the R8 is selling mega-lots...affecting Porsche sales, they are still getting the revenue - just from another branch of the main company.

so why would it matter if Porsche owned VW?

It may be because the Porsche brand is so strong that it can generate mega margins whilst Audi, still desirable but not as much so, cannot therefore losing revenue. Plus I am sure there is an emotional element about protecting Porsche which is understandable.

My biggest fascination with this centres on how Porsche, from near bankrupcy in the early 90's, can now potentially take over such a huge company which is itself very successful. Anyone???

[ScoobieWRX]

Don't they have laws on monopolies in Germany.

It seems to me a bit odd for a government to allow such mergers/takeovers, and unfair to the buying public that there should be so many car manufacturers under one roof. So if one entity has control over all of them there must be confict of interest between all these manufacturers at one time or another, and other such anomalies that will ultimately be detrimental to 'free thinking','Innovative' and 'competitive' business practice.

I cite Microsoft being one company that clearly has a huge monopoly/unfair competition over other O/S houses with much control over what O/S PC manufacturers use and the software applications offered within. They have just been fined bigtime for such monopolising practices, but i don't see the german government or the Euro parliment having a go at the VAG/Porsche group for doing exactly the same.

IT all seems to me to be......VW can't do this because Audi have one of these and are already doing it, and Audi can't do the other because of Lamboghini have this already and all this malarky etc...etc... It's all got a bit silly in my opinion.

When will it all stop??

[PhantomPH]

Two words :

Boxster
Cayenne

[Marki]

Frimley111R said:

My biggest fascination with this centres on how Porsche, from near bankrupcy in the early 90's, can now potentially take over such a huge company which is itself very successful. Anyone???

I aggree , it seems a bit like the tail wagging the dog

[Wadeski]

I really wish they hadnt gone for something as big as VW.

Saab would have been a perfect brand for Porsche to experiment with mass-market with. And a chance for them to stick it even harder to their Bavarian rivals!

GM have no idea what they are doing with teh brand, and if they can be restructured to sit closer to Porsche's model of semi-niche, profitable, sporty cars then so much the better.

[Fetchez la vache]

Wadeski said:

I really wish they hadnt gone for something as big as VW.

Saab would have been a perfect brand for Porsche to experiment with mass-market with. And a chance for them to stick it even harder to their Bavarian rivals!

GM have no idea what they are doing with teh brand, and if they can be restructured to sit closer to Porsche's model of semi-niche, profitable, sporty cars then so much the better.

But Saab are owned by GM. Porsche aren't going to buy GM. Why ask GM what it's worth to prise it off of them when you can buy an operation just down the road that's turning a profit?

[Wadeski]

if you fancy a life in retail, do you start buying your local convenience shop or Sainsbury's?

[Panayiotis]

Porsche doesn't want to be part of VW, so it would rather have it the other way around. The EU is forcing manufacturers to lower their emissions across the range and hence if Porsche can utilise the VW range as its own, it will not need to make major alterations to the drivelines of its cars.

[skid]

I think it's fully logical since the History of the 2 firms goes back to the first Beetles and Ferdinand Porsche.

Since then there has always been technology shares or cross developments and sharing of components. Think 356, 914, 911 (ish), 924, possibly some of the 944 etc.

I think it's a case of not if but when this was going to happen.

M

[mk1fan]

ScoobieWRX said:

their post

Did you not read the article before posting????

[bencollins]

skid said:

I think it's fully logical since the History of the 2 firms goes back to the first Beetles and Ferdinand Porsche.

Since then there has always been technology shares or cross developments and sharing of components. Think 356, 914, 911 (ish), 924, possibly some of the 944 etc.

I think it's a case of not if but when this was going to happen.

M

good point

[ganser]

skid said:

I think it's fully logical since the History of the 2 firms goes back to the first Beetles and Ferdinand Porsche.

Since then there has always been technology shares or cross developments and sharing of components. Think 356, 914, 911 (ish), 924, possibly some of the 944 etc.

I think it's a case of not if but when this was going to happen.

M

Agree. Thats why JC keeps calling the 911 'the Beetle'. Also the VW Law was there to prevent VW from being taken over by foreign investors. Seeing as Ferdinand Piech is the grandson of Ferdinand Porsche it also makes sense, and i get the impression the families are heavily involved in both companies. As mentioned above its also interesting how its VW, not Porsche, being taken over.

[tinman0]

mk1fan said:

Not sure if Porsche ownership would be a good thing or a bad thing.

What will happen to Bentley, Lambo, Buggati and the Audi R8?? All of which are potential Porsche sales.

I don't think its a problem.

For what its worth, i think VAG have managed the brands in its stable incredibly well, and dont seem to mind an Audi sale lost to VW, or a VW sale to Seat. At the end of the day, the sale stayed within the group. So I think in an enlarged PVA Group, this thinking would carry forward.

The only problem is if Porsche have an ego problem, and can't live with sales being lost from Porsche to Lambo or Audi.

However, at this stage, its worth reminding ourselves of the last German company who bought an ailing brand, Rover. BMW totally stuffed up their ownership of Rover because imho they still viewed Rover as a rival. The 75 was a great car, but it was very retro and British. But its an outside view of Britishness. BMW could of done so much with Rover, but if you read the history there was a "them and us" attitude from the German side.

And as far as I could tell, if BMW lost a sale to Rover, it was a bad thing, despite the group still making the sale.

That is the lesson I think Porsche will of learned from BMW, and I'd put money on it that a VAG executive will reinforce that thinking into the incoming Porsche board.

[wushuhsu]

The EU needs to step in and rule separately to prevent Porsche AG from taking over VW. At the very least, it should force Porsche AG to divest its share of Audi. Allowing Porsche AG to take over Audi would be very bad for consumers and for fair market competition. Porsche has already killed the 6-cylinder version of the Audi R8, which was to be a 400+ HP mid-engine Aluminum-alloy with DSG and the famed Audi interior competitor to the Porsche Cayman S priced at less than the base Cayman non-S. It's no wonder Porsche AG would pay any price to control Audi.

[Martin Keene]

Panayiotis said:

Porsche doesn't want to be part of VW, so it would rather have it the other way around. The EU is forcing manufacturers to lower their emissions across the range and hence if Porsche can utilise the VW range as its own, it will not need to make major alterations to the drivelines of its cars.

I think you might have the nail on the head there...

[ScoobieWRX]

mk1fan said:

ScoobieWRX said:

their post

Did you not read the article before posting????

In answer to your question....

The gist of the news item as i interpret it, is that now they have changed the way VW are doing things Porsche gets a stab at being king of the castle and ruler of all they survey, if and when they can and want to. That's no ing different to VW's current position which is doing exactly the same thing. Nothing changes and there is still a huge monopoly there controlled by one entity. That doesn't de-monopolise anything does it!! All it does is open the doors for someone else to do exactly the same.

Yep...i read all of it...why??...did you not read mine properly?? I made a genuine comment in reply to the news item, what's the problem??

Anyway...Their post!! I do hate smartarses. WIT!!