Most of us at some point have aspired to own a Porsche, this iconic German brand has been synonymous with being a must have for the well heeled and the up and coming wannabees. Whether you want a classic 911 in it's various guises or a four wheel drive executive in the shape of a Cayenne you will be making a statement about yourself and your expectations on life. Porsche have managed to create a brand which not only appeals to those who want a real driving experience but also don't want to spend hours going to dealerships to get their piece of exotica repaired.
So what on earth is going on, this highly sort after brand has had real aspirations to get involved in the volume market by showing more than a little interest in buying Volkswagen Group, a slight change in direction I am sure you will agree!
The sequence of events broadly speaking are listed below.
March 2008 -Porsche stated it would take a controlling stake in VW, this through increasing it share holding to 51%
October 2008-VW becomes the largest company in the world based on market value following a huge surge in their shares. This came about after it became clear that Porsche were buying up large chunks of VW shares, which left fewer available for hedge funds to buy, these were needed to allow the hedge funds to close their positions.
January 2009- Porsche ambitiously announce they want to increase their stake in Volkswagen to 75%, poor timing as the credit crunch and car sales in free fall prevented this going ahead. I am sure Volkswagen in some respects are more than a little pleased, hoping to see their position change for the better.
May 2009- The ongoing talks between Porsche and Volkswagen collapse after a merger was agreed but Volkswagen subsequently demanded that Porsche reduce it's debt.
June 2009- The writing is on the wall for Porsche as their request for 1.75bn euros loan is turned down, this money was needed as a direct consequence of it's attempts to gain complete control of Volkswagen
July 2009- A complete reversal takes place and Volkswagen announce it's planning to buy Porsche, shortly after this the chief executive Wendelin Wiedeking and financial director Holger Haerter both resign.
August 2009-Porsche acquisition hopes are finally completely dashed following Volkswagen announcing they will be buying a 42% stake in the beleaguered Porsche brand. Then to put the icing on the cake Porsche offices are raided by the federal prosecutors.
Why?
It is alleged that there had been market manipulation of Volkswagen shares, Porsche, have as you would expect denied the allegations and have agreed to co-operate with the prosecutors.
In the earlier part of the year (first three months)the share prices directly contributed to 6.4bn euro's to the company's pre tax profit of 7.3bn euros. This has led to comments from some quarters that Porsche had become an enormous hedge fund, with the car making side of the business as a second string.
So, this darling of the rich and famous has indeed had a monumental change in fortunes, no longer a cash rich business predominately in private hands. Only last week Porsche announced that the state of Qatar would take a majority stake in the business, Qatar will eventually become Porsche's third biggest shareholder behind the Piech and Porsche families and the German state of Lower Saxony.
It's fascinating to see these manufacturers constantly looking to acquire brands and build their empires, even in these difficult times with the global recession still hitting the motor industry hard. With Volkswagen acquiring 42% of Porsche they in effect will become the 10th brand under the Volkswagen umbrella. They will be joining some of the great names in the global market, VW Cars, Seat,Skoda, in the prestige car market they will join Lamborghini, Bentley and Bugatti. They also have a string Commercial vehicle offering in the shape of VW Commercial vehicles, Scania AB and a share holding in MAN SE.
So to sum up will this takeover have a negative effect on the Porsche brand, I suspect not it's certainly not had a negative impact on Lamborghini and of course the awesome Bugatti Veryon (would never have been built without Volkswagen deep pockets). Once the dust has settled it will be business as usual, however it could be fun to point out to some folk they are driving a cousin of Skoda.
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