Porsche-VW merger stalls

Porsche was set to up its stake in Volkswagen to 75 percent today (Monday 18th May 2009), but the move has stalled because VW says the sports car maker is “lacking several fundamental conditions for the discussions,” according to a VW spokesman.

An unusual situation has developed among two of the world's car heavyweights, because Porsche already owns more than half of VW; a brand including Audi, Bugatti and Lamborghini, and officially the third biggest carmaker in the world.

But it seems top brass at VW do not want to be taken over by Porsche, instead favouring a merger in which Porsche would effectively become another one of VW's sports car brands. Ferdinand Piech, Volkswagen's influential chairman, is reportedly a proponent this approach, and has named current VW Chief Executive Martin Winterkorn as his preference to lead the new group. However, although Porsche hasn't commented yet, it is understood that its boss Wendelin Wiedeking would also want to take charge of the newly formed maker.

Either way, a stronger tie between the two makers seems inevitable, raising the prospect of further crossover between Porsche and VW models. What that means is unclear, but there's already talk of a shared platform for a 'cheap' sports car for Porsche, Audi and VW based on the same concept as the VW BlueSport Roadster unveiled at this year's Detroit Motor Show. Porsche is already tapping into VW's excellent TDI technology with the forthcoming Cayenne diesel SUV, but future Porsches would share underpinnings and running gear with other VW Group cars too.

Mark Nichol