By on April 28, 2016

Bentley Bentayga

Rival automakers salivating at the thought of snapping up a castoff from Volkswagen’s brand portfolio will have to sit and wait.

Amid grim fourth-quarter financial data and ongoing expenses linked to the diesel emissions scandal, the company is standing by its assets, but admits they might have to jettison some if unexpected expenses crop up.

After delaying the release of a 2015 financial report for months, Volkswagen said it posted a 127 million euro loss ($144 million) in the last three months of the year. Compare that to a 780 million euro ($885 million) profit in the same period a year earlier.

Volkswagen CEO Matthias Mueller told reporters at a Wolfsburg press conference that the company can “hardly avoid saying that the current situation demands everything of us, in every respect — including financially.”

Despite setting aside billions last week to cover scandal-related costs, about half of which will go to cover the U.S. buyback program, the company’s annual report states that it could have to shed assets to cover future costs.

“The funding needed to cover the risks may lead to assets having to be sold due to the situation and equivalent proceeds for them not being achieved as a result,” the company said in today’s report.

The company’s chief financial officer, Frank Witter, downplayed the report after its release, stating, “We believe in our multi-brand group, so we don’t have brand or unit sales on the agenda at all.”

The future contains uncertainties, he then implied, leaving the door open to potential asset sales if Volkswagen finds itself against the financial ropes.

Among other makes, Volkswagen Group owns the prestige brands Lamborghini, Bentley, Bugatti, and Ducati.

[Image: Bentley Motors] [Sources: Bloomberg, Reuters]

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42 Comments on “Volkswagen Isn’t Selling any Brands Just Yet, But it’s Still Their ‘Plan B’...”


  • avatar
    sirwired

    My favorite VW update of the day is the NYT story about how Mueller has revealed he personally begged Obama for mercy last week when he was in Germany.

    Given all the new information over the last week, I’d say this is definitely a case of not being sorry you did it, just being sorry you got caught.

  • avatar
    olddavid

    In light of their profitability of the last few years, I would believe them to be in good shape to absorb a substantial payout. I doubt they will have to hock the VW symbol, a la Ford, to foot the tab. But, if it amounts to a corporate body blow, I would guess the banks would line up to loan them funds. But what do I know – I used to argue with Farago that GM would never go BK.

    • 0 avatar
      RobertRyan

      Seeing they are popping out new models all the time for the VW group, including that Bentley in the photo. It was mentioned, they could sell of their other investments, not brands to provide funds

    • 0 avatar
      johnny ro

      I do not understand why anyone would pay money to take VW brandname from VW.

      Felt the same way for Ford.

      Wreck the company, wreck the name.

      Its not 45 years later with people getting misty eyed about their youth.

      In fact, might have to pay another company billions to start labeling their cars VW. Once the dust settles on the fines plus the lawsuits.

  • avatar
    seth1065

    Not really sure what VW has to sell, I guess China would buy some of the lux brands , maybe but unless they want to unload their truck business , not sure what would draw big bucks or who would buy it.

    • 0 avatar
      Whatnext

      Er, wot? How ’bout Bentley? Bugatti? Perfect baubles for some middle aged magnate. And if they are in such dire straits they need to spin off more core brands how about those who have been having record sales, like Audi or Porsche?

    • 0 avatar
      whynot

      VW would have no problem finding people to buy Audi (not that they ever would sell them), Porsche (not that they ever would sell them), Bentley, Lamborghini, Bugatti, and Ducati.

      Skoda and especially SEAT would be harder sells due to their more limited global footprint, but they could still probably find someone who would take them (in those two cases likely the Chinese).

      • 0 avatar
        NoGoYo

        I don’t know why VW needs SEAT AND Skoda.

        • 0 avatar
          bball40dtw

          They don’t either.

        • 0 avatar
          RobertRyan

          Very simple answer, Skoda is very profitable for VW and they have a good reputation for build quality

          • 0 avatar
            bball40dtw

            That’s not the answer as to why both SEAT and Skoda exist though. SEAT is duplication of both VW and Skoda. SEAT mostly exists because it’s production facilities are modern and can build Audis. They should kill the brand and still build VWs and Audis in Spain and Portugal.

          • 0 avatar
            Pch101

            “SEAT is duplication of both VW and Skoda.”

            It is more accurate to say that Skoda is a duplication of VW. VW owned SEAT before it acquired Skoda.

            “SEAT mostly exists because it’s production facilities are modern and can build Audis.”

            The Leon and Ibiza are the best selling cars in Spain.

          • 0 avatar

            “The Leon and Ibiza are the best selling cars in Spain”

            But not in China. I suspect that Spaniards have a bad credit or no credit. VW keeps SEAT exactly for the same reason why GM keeps Pontiac. No wait… Is VW going to file for bankruptcy?

          • 0 avatar
            RobertRyan

            “But not in China. ” VW /Audi not Skoda or SEAT are the main brands pushed in China. Skoda and SEAT are regional European Brands

      • 0 avatar
        karonetwentyc

        Of the two, SEAT would make the most sense to sell. There may not be a ton of value in the name, but they do have EU-based manufacturing facilities which could prove attractive to an overseas manufacturer.

        Skoda at least is the ‘value’ end of the VW arm, so fulfills a logical niche – and from what I’ve seen of their cars they sometimes do a better job of building VWs than VW itself does.

    • 0 avatar
      RobertRyan

      Not selling any Truck or Commercial Businesses, in the case of Scania, they actually still do not totally own it and the Swedish Government has a veto. Commercial businesses make a LOT of money for VW

  • avatar
    87 Morgan

    I would think a Shah or two from Bahrain or some other oil rich country may be looking to diversify some holdings and Bentley and Lambo could be just the ticket.

  • avatar
    mcs

    GM could use a luxury brand. Bentley would be perfect.

  • avatar
    Tstag

    I suspect possible bidders for Bentley would include Daimler and Jaguar Land Rover. For Daimler it solves an issue they’ve had in trying to replace the Maybach with something people actually want. For JLR it would crown their model range nicely and wouldn’t really compete with anything else they make. And if BMW ever felt like selling Mini I suspect JLR would also be in the queue for that as it would then mean they have a complete range of premium models.

    Chinese may also go for Bentley but while it might be a nice Jewel it’s probably the wrong type of buy for their car industry right now.

    As for Bugatti then I’d rule in BMW and Daimler although it needs to be repositioned to compete with Ferrari to give it some volume

    • 0 avatar
      Jagboi

      I did a double take at your post, as it took me a while to realize by “Daimler” you mean Daimler-Benz. Jaguar bought the Daimler Car Company in 1960, and still owns the rights to the name. Daimler is the oldest British car maker, founded in 1896. Unfortunately, they have not made a Daimler badged car since 2009.

    • 0 avatar
      RobertRyan

      Daimler….Mercedes Benz could merge with VW, making it by far the largest Automotive business on the planet. Daimler has vast reserves of money, VW still has a lot of money.Truck, Commercial and car resources would be enormous

    • 0 avatar
      W205LVR

      A Daimler and Volkswage merger dosent sound like a bad idea as long as they don’t charge Mercedes prices for parts and labor on VW’s

  • avatar
    sirwired

    I don’t see VW selling Audi (too tightly tied into VW; lots of engine/chassis/parts sharing going on… Audi uses the MQB chassis, and VW uses a lot of Audi-developed engines. A separation would be a mess trying to work out how much for each new company to charge the other for things.) I imagine selling VW Truck would have much the same problem. (At least in regards to powertrains.)

    But Porsche? Other than the Touraeg/Cayenne, it’d be clean split, and collect a lot of money. But since they’d never sell, they’d have to dump the niche luxury brands, but I’m not sure they would get enough for them.

    Skoda and SEAT… do those brands even HAVE any unique vehicles, or are they all VW rebadges?

    • 0 avatar
      derekson

      Porsche is their most profitable brand and the namesake brand of the company’s founder. They aren’t selling that unless they are in massively dire straits. Even Bentley doesn’t really make sense to sell, since they’ve integrated a lot of development with Porsche now and they have a license to print money with the new Bentayga (they’ve already sold at least a year’s worth of production @ $300k apiece). The next Panamera and Continental/Flying Spur are sharing the MSB platform.

      If they have to sell a brand, the first to go would be things like Ducati and Lamborghini. If those didn’t bring enough money, maybe Seat goes next or Scania or MAN trucks.

      • 0 avatar
        RobertRyan

        Scania and MAN are very profitable and have Global connections everywhere except NA. Before the GFC both Truck brands were producing more class 8 Tractors than all of NA and that includes Mexico. Scania is the most profitable Truck maker Globally

        • 0 avatar
          derekson

          TO be clear: I don’t expect them to sell any brands. But I could see themselves divesting of truck businesses before they’d drop brands that share development costs with other brands they’d never sell.

    • 0 avatar
      DenverMike

      Some of those brands are crazy profitable, but what VW needs is on a whole other level. Their US exposure is small potatoes, compared to globally.

      • 0 avatar
        derekson

        Other countries don’t have the same kind of tort law or penalties like the EPA fines that the US has though.

        • 0 avatar
          DenverMike

          What about the ‘defective’ TDIs themselves? Only 5% or so, went to the US.

          • 0 avatar
            derekson

            The standards they need to meet when fixed are far less stringent than the US regs, making them much easier to fix. And without US tort law, there’s almost no leverage to force them into buybacks in the ROW markets.

          • 0 avatar
            DenverMike

            US response and action, is all the leverage needed. What kind of message would VW send their bread-n-butter markets, treating them like 2nd class hogs, getting fed leftover scraps.

          • 0 avatar

            Why not just abandon US market altogether and do not pay a dime?

          • 0 avatar
            DenverMike

            VW may still do that, makes too much sense not to abandon the US. If they stay, it’s for Mexico and Mexico alone. ‘That’ I know they’re not abandoning!!

          • 0 avatar
            RobertRyan

            It think in the long run abandoning the US market makes a lot of sense BUT, I have heard rumours ( from several sources)during Dieselgate, that VW is pushing Scania and MAN to jointly make a bid for Navistar. If this was a chess game, that would be very unusual opening move

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