When I was in China, I saw more VWs than any other (recognizable) brand. Most were taxis (looked like the old VW Quantum), but Passats and Jetta (various styles) abounded. The new Jetta (Sagitar) appeared to be popular in China, also.

So where is VW selling all these vehicles?

Toyota is in big trouble since their main markets in the US and Japan are in a tailspin.

Europe is down but not as much.(first quarter GDP down around 5% Germany down 3.8% Russia down 23%)

China is the anomoly. Increasing sales which I think are likely to tank.

I worked for JAKrause once and spent a summer in Germany.(utside of Bremmen) An interesting experience. Great mechanical stuff and controls that were way overcomplicated. Great food and gorgeous women.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_tKd1Bf1.YA&refer=home

It’s a long story. Sine 2005, Porsche bought larger and larger slices of VW. Yet, they denied that they were intent on the majority. Their engagement was widely viewed as the chivalrous act of a white knight who protected the virginity of VW from rape by foreigners, takeover artists, or gypsies.

In February 2008, they had less than 50%, and had said they don’t want more.

According to the transcript, they disclosed in the Feb meeting, that they were intent on 75%. At this point, according to German law, Porsche would have been able to book all VW profits as theirs. However, Lower Saxony and their special minority shareholder rights were in the way. The transcript doesn’t say why they disclosed to the state that they wanted 75%. It just says that they disclosed it. And that’s the crux of the matter. In March 08, Porsche gave green light to acquire more than 50%, but denied that they were after 75%. The gist is that it is alleged that they had publicly lied and hence violated securities law.

The transcript also says that it was said that without 75%, the whole thing may fall apart (threat, threat.) Well, it’s falling apart.

High stakes poker.

Great write-up, the only part I’m unclear on is..

The German magazine Wirtschaftswoche just happened to come across the transcript of a clandestine meeting held in early February 2008 between two Porsche executives, their lawyers, and a ranking representative of the government of Lower Saxony, holder of 20% of the VW shares.

In that meeting, Porsche had announced their intent to buy 75 percent of Volkswagen. Not only that, they said they wanted to make sweeping changes at VW, and to strip Lower Saxony of its controlling minority,

Am I reading this correctly? Why would Porsche attend a meeting, with a ranking rep from Lower Saxony in attendance, and announce their intent to remove them from the equation? Seems like that would be counterproductive to their cause…

Or, is that the point? :-)

Gimme more :D

AKM: I meant those luxury brands sharing platforms and parts. Obvioulsy the Bugatti won’t get the Lupo motors and vice versa…

Great writing. Convoluted, confounding, captivating.

That Piech is a peach.

About the brands: Volkswagen is basically a huge brand (VW,) a large brand (Audi,) two mid-sized brands (SEAT and SKODA) and a bunch of toys: Bugatti, Lamborghini, Bentley, and maybe I have missed some. I did: Trucks (their own light ones, Scania, and 30% of MAN. They currently wish they wouldn’t have done that.)

The huge, the large, and one of the mid-sized brands (Skoda) are doing fine. Only SEAT is a disaster, due to their exposure to disastrous Spain. VW is currently the second largest manufacturer in the world. Don’t look at them through U.S. eyes. After a huge success (into which they bumbled) with the Bug, they had made a mess out of the U.S. market. For a while, they even thought of retreating. Being small in the US shelters them now from the US car malady. Where you don’t have much, you can’t lose much. That sets them apart from Toyota, which takes the full brunt.

As for the toy brands, they are basically there for the entertainment of the top executives. They make less than 100 Bugattis a year, by hand. They make a few thousand Lambos, and maybe 10K Bentleys. Bentley actually makes some money. In the grand scheme of things, the toy brands don’t count.

Their platform-sharing is actually quite clever: One wouldn’t think or see that the New Beetle, the Bora/Jetta/Vento/Sagitar, the Audi A3, Audi TT, Scirocco and countless others are all based on the same Golf (PQ35) platform.

What nearly NSFWed them up was the Phaeton. But not because of the alleged billions that car did cost to develop. Or the stupid idea of an über-factory in the center of Dresden into which nearly complete Phaetons were brought by tramway for final production in front of the eyes of the customer. The floors of that factory are parquet – wood! Bright wood for where the car doesn’t touch the floor. Dark wood for where tires roll. Insanity, but tolerable. The car even sells – in a way. About 6000 a year. A lot of them in Asia, China takes over 1000. Last year, 3000 Phaetons were registered in Germany. BMW 7series? 4200. What screwed them up was that for years, the whole company got fixated on the Phaeton, thought only Phaeton, did only Phaeton. The bread & butter cars suffered from attention deficit. What’s worse, even the smallest cars turned into mini-Phaetons in the course of the “up-positioning” of the whole VW brand. Humor was suddenly verboten, Volkswagen lost its folksy touch.

I had a lot of fun at Volkswagen since 1973. But when the Phaeton came in 2002 (and in the years before its launch) the fun evaporated. Everything got dead serious. In 2005, I left. Just in time, because the hooker scandal hit, and the last bit of fun during otherwise boring conferences was suddenly verboten also. (And it made the toy brands the only legit – even slightly obscene entertainment.) The Phaeton is a fun car to drive though, as Jack Baruch will confirm. Especially with the 12 cylinder W engine and a friend at VW, who hooked up his VAS 5051 and killed the speed limiter. Even more fun at 300+ km/h in a car that looks deceptively like a Passat in a rear view mirror.

@kaleun:I haven’t seen a 4-turbos 16-cyl engine in a VW yet. Let me know when the VW Golf R120 comes out :-) It’d be even better than the 12-cyl prototype.

And having 5 luxury/sports brands… they only would make money if they shared components/platforms. but especially in that segment you need differentiation. People that buy a Skoda don’t care that the same motor is used in Seat and VW… but a Bugatti buyer might care.

And the idea to establish VW (people’s car) as a premium brand (Phaeton), which cost billions, delayed the new Golf, was so dumb…. and now the same people are allowed to rescue the company?

Their only hope is for Opel to disappear, then they could sell some more cars for a while.

This is all just stupid powerplays. They should concentrate to built better cars for the mass market, not in Bugatti Veyrons, Bentley Arnages, Lamborghini Murcialagos etc. I know that this is a personal Piech thing … to built the “best” cars in the world.

But then again there is the volume bringers. I still think it was a big mistake to shove the development of a “new” Golf and instead to do a facelift on the old V and call it the VI.

If Opel survives until the end of year and manages to bring the new Astra into production it could give the Golf a hard time in a already very competitve market. The new Megane is not helping VW either. It might have saved them a few million bucks on the developement front, but it could also cost them dearly to miss one generation out.

Remember … Jacques Nasser tried the same thing at Ford Europe. It nearly killed them.

This whole saga is going to make a hell of a book someday. Truly epic. Thanks for the detailed write-up, Bertel.