Porsche Taking Over Volkswagen
Porsche AG has increased its share holdings in Volkswagen (VW) to 50.8%. Porsche plans to increase that to 75% this year but still does not control the management of Volkswagen. If Porsche fulfills its intentions to increase over 75%, the domination contract law will go into effect and it would gain total financial control of Volkswagen.
If you are just reading about the jointing figures, these two German companies have had a long history together. The Chairman of the Supervisory board at VW is Ferdinand Piech. He is the grandson of Ferdinand Porsche, who is the founder of Porsche AG. As Ferdinand moved up through the ranks at Audi and VW, he became famous for his Volkswagen Beetle design.
The Porsche takeover of VW is almost a done deal. Porsche has been on this mission for more than two years now and it’s bottom line figures, prove it’s an excellent move. In Porsche’s last annual reporting year, it had an operating profit of one billion euros from auto sales, but the company’s net income was 6.39 euros thanks to the increased value of VW stock.
Although the recession has hurt car sales, VW still managed to increase its market share. It now has 2.8% of the U.S. market, which includes sales from its Audi brand. Both VW and Audi had sales decreases in 2008, but they were smaller than most of the other car companies. VW dropped 3.2% while the total auto market drop was 18%.
Although the recession has hurt car sales, VW still managed to increase its market share. It now has 2.8% of the U.S. market, which includes sales from its Audi brand. Both VW and Audi had sales decreased in 2008, but they were smaller than most of the other car companies. VW dropped 3.2% while the total auto market drop was 18%.VW is enjoying resurgence in its popularity, thanks to the comeback of passenger cars. Passenger cars outsold SUVs for the first time since 2000, last year. VW is expanding its manufacturing presence in the U.S. and has plans for a big future.
The Porsche takeover of VW seems like a natural move, although you might think that it should be the other way around. VW sells about five million cars a year and Porsche only sells 100,000. Whatever the figures are, the Porsche takeover of VW is a great strategy for these two great German companies. With the automobile industry going through a major transition, the merger will help them financially, organizationally and in product development. On the contrary, the biggest winner in this takeover, will be the consumer.