Porsche-VW Will Save $1 Billion

The recently announced merger between the two German giants Porsche and Volkswagen is poised to allow the two carmakers the saving of around $1 billion each year, as VW group CEO Martin Winterkorn was quoted as saying by

The prediction made analysts say the forecast may be too ambitious, but Winterkorn says his estimates are "very realistic." On the Porsche front, Michael Macht, Porsche AG CEO, said that his company intends to boost annual production to some 150,000 units with the addition of a fifth model.

The tie-up between the two companies is expected to take some time, due to the large pit Porsche slowly sunk in. Yet, German newspaper Die Welt reported last week that the two have moved the initial 2011 deadline to complete the merger to 2010.

Yesterday, reports surfaced in the German media claiming that the knight in shining armor, the state of Qatar, got a big discount on buying Porsche's VW shares. According to the reports, Qatar has also bought from Porsche options on 50 percent of VW's non-voting preferred shares, for 63 euros each. For the ordinary shares, Qatar is said to have paid 80 euros per share.

The accelerated merger will seek cost synergies through joint purchase and logistics, closer cooperation in financial services, joint development projects and the use of similar modules in both groups.

According to VW CFO Hans Dieter Poetsch, Volkswagen will post "very impressive" results for its operating business for the 2009 fiscal year, placing it on the way of becoming the world's number 1 automaker prior to the initial term of 2018.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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