Photo: Alexandru Sincan
Lately, some business advisers discretely mentioned that Volkswagen AG is considering a separate listing of its Porsche sports car unit in a deal that could boost its valuation and bring in a significant amount of cash.
Also, Chief Executive Officer Herbert Diess sounded the alarm in an interview with Bloomberg News last month about how Tesla Inc and other electric-vehicle companies are cashing in mainly on market optimism.
On the other hand, investors have taken a dimmer view of VW and other legacy automakers, which will need to spend tens of billions to develop EVs. That's on top of the financial effort required by restructuring operations related to their combustion engines.
“Listing the Porsche brand separately would be a bold solution for VW to generate the much-needed shareholder value,” said Michael Dean, Bloomberg Intelligence analyst. Dean mentioned his analysis indicates that Porsche has a value of €110 billion ($133 billion) right now, more than its parent company.
Beyond this, Porsche’s plan to be almost all-electric by 2030 (with the exception of the 911 model) could “attract Tesla-like multiples while generating a Ferrari-like Ebitda margin.” Recently, VW’s preferred shares rose as much as 6% in Frankfurt trading. At about $757 billion, Tesla’s market value is about seven times higher than VW’s €90 billion ($109 billion).
Now, let’s step back to see the bigger picture. Somehow funnily, a Porsche listing would reverse the acquisition it concluded about a decade ago. In 2012, Volkswagen bought the remaining 50.1% stake in Porsche’s automotive business for €4.46 billion.
Yet, the horizon of the automobile world looks a lot different now. Demand for coupes and convertibles of all kinds is going down, autonomous vehicles seem to be waiting just around the next corner (Porsches are made to be driven), and the growth of electromobility will act like a tsunami over the sports car segment as we know it.
On the other hand, Porsche is not the only exclusive luxury brand owned by the VW Group. That said, what are the real reasons behind VW's reported intentions? Selling Porsche while it’s still hot might be the alternative scenario, after all.
On the other hand, investors have taken a dimmer view of VW and other legacy automakers, which will need to spend tens of billions to develop EVs. That's on top of the financial effort required by restructuring operations related to their combustion engines.
“Listing the Porsche brand separately would be a bold solution for VW to generate the much-needed shareholder value,” said Michael Dean, Bloomberg Intelligence analyst. Dean mentioned his analysis indicates that Porsche has a value of €110 billion ($133 billion) right now, more than its parent company.
Beyond this, Porsche’s plan to be almost all-electric by 2030 (with the exception of the 911 model) could “attract Tesla-like multiples while generating a Ferrari-like Ebitda margin.” Recently, VW’s preferred shares rose as much as 6% in Frankfurt trading. At about $757 billion, Tesla’s market value is about seven times higher than VW’s €90 billion ($109 billion).
Now, let’s step back to see the bigger picture. Somehow funnily, a Porsche listing would reverse the acquisition it concluded about a decade ago. In 2012, Volkswagen bought the remaining 50.1% stake in Porsche’s automotive business for €4.46 billion.
Yet, the horizon of the automobile world looks a lot different now. Demand for coupes and convertibles of all kinds is going down, autonomous vehicles seem to be waiting just around the next corner (Porsches are made to be driven), and the growth of electromobility will act like a tsunami over the sports car segment as we know it.
On the other hand, Porsche is not the only exclusive luxury brand owned by the VW Group. That said, what are the real reasons behind VW's reported intentions? Selling Porsche while it’s still hot might be the alternative scenario, after all.
Google News