Porsche Holding Buys More VW Stakes from Suzuki, Despite Having Lost $10B over Dieselgate

Porsche 356 towing VW Beetle 1 photo
In the case of the Volkswagen Group, as well as that of most German carmakers, a new car stays in production for about eight years or so, with a tech-infused facelift at the middle of that timeframe. But the time has now come to see what the company does with its finances in such an interval.
For those of you who have been avoiding financial news since 2007, we have to mention that was the year when Porsche attempted to take over the entire VW empire using financial engineering. The bid failed, with Porsche’s scheme being exposed.

The Porsche Holding has to sell its sportscar arm, the Zuffenhausen maker thrilling us with its 911 variations, to the Volkswagen Group in order to survive.

While the head honchos, former CEO included, managed to exit the stage without major consequences, the responsibility is still following a pair of former Porsche execs, whose trial is sheduled to take place this fall.

Fast-forwarding to the present time, we find the Porsche Holding and Volkswagen AG in a marriage-like relationship, where the latter owns the Porsche brand, but the Porsche Holding is the major VW AG shareholder - back in December 2014, Porsche Holding owned 50.73 percent of VW Group shares.

Well, that balance has just tipped towards Porsche, albeit with a small step. To be more precise, Porsche Holding has now acquired an extra 1.5 percent of VW AG stock.

We are talking about ordinary stocks, which were purchased from Suzuki.

"Porsche SE considers the purchase of 4.397 million ordinary shares as a strong commitment to its core investment and emphasizes its role as an anchor shareholder in the Wolfsburg-based car maker," an official Porsche statement reads.

The move might come as a surprise if we only focus on the fact that Porsche Holding has lost over $10 billion (a little over EUR9 billion) on its VW AG stock in over a week of Dieselgate troubled weather.

It all adds up

It only makes sense for the bond between the two to become only stronger now that VW is under fire all over the world.

Now that Porsche’s CEO Matthias Muller has become the CEO of the Volkswagen Group, the bond between the companies is becoming stronger - Muller started his career at Audi, holding a junior management position in the IT department.

Muller was also head of VW’s product strategy, covering all group brands in the years that saw the company introducing its defeat devices that have now led to the Dieselgate.

Now that Martin Winterkorn has stepped down as VW CEO, we hope the finger pointing stops. What we should ask of the VW Group under Muller is the use of the executive’s background not just to overcome the scandal, but perhaps also to develop new engine technologies that will show figures like Elon Musk the internal combustion engine is far from having reached the peak of its development.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram
About the author: Andrei Tutu
Andrei Tutu profile photo

In his quest to bring you the most impressive automotive creations, Andrei relies on learning as a superpower. There's quite a bit of room in the garage that is this aficionado's heart, so factory-condition classics and widebody contraptions with turbos poking through the hood can peacefully coexist.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories