How a reverse VW-Porsche takeover might work
Unless you have been living in a cave the last two years, you know that Porsche’s strong financial position has allowed them to make a gradual play for VW’s shares. In fact it is just the latest in what has been a long-time partnership between the two + Audi. You may recall that many years ago Audi+Porsche dealerships often shared the same building.
But what we really didn’t know until recently was how Porsche might use VW in their product portfolio. Remember that the VW Touareg , Audi Q7, and Porsche Cayenne share the same platform. The benefit being significantly cheaper development costs. Bear in mind that Porsche has had a benefit in this partnership of releasing their Cayenne before VW and Audi have released their products. Ironically, it is the smashing success of the Cayenne product line that has given Porsche the ability to launch a takeover of VW.
To be sure, we can expect the product lineups to be very similar to the current options, but if this report serves us correctly, the corporate structure will be a bit different than what we’ve seen before. Indeed if the report is correct, Porsche will not server as the “premier” or top-tier marque as such. Rather, they will be another brand in a portfolio of brands.
As such, this is argument that Audi will be pushed out of the mix. They do, after all have cars, which directly compete with Porsche’s offerings. So here is how we think things will shakeup. At the base of the company, VW will still provide us with economical, small cars and likely continue to sell them for under $35,000. SEAT and Skoda will possibly remain the mix and are likely to remain under $30,000. Next in the hierarchy, Audi will sell its smallest cars for under $35,000 but the prices will extend to around $125,000. Audi may be repositioned to become less of a sports car maker, as Porsche is, and will continue to be, but more of a sporty sedan maker. As such the TT and the R8’s future remain up in the air.
Porsche fills the $45K to $130K price range and really excels in sports cars, and this will of course continue.
On up the pay scale, we see Bentley and Lamborghini. Both start in the high-$100Ks, but Bentley is slightly more focused on luxurious driving, whilst maintaining a sporty heritage with its ‘Speed’ series. Lamborghini is an all-out crazy supercar maker, which competes almost exclusively with Ferrari (and maybe the Porsche GT2).
Bugatti, of course, remains top-tier with its $1.5 million, 254-mph Veyron 16.4.
There does remain a couple of gaps in the portfolio, notably, the $130K-$175K price range, and the $375,000-$1.5 million range. Mind you the number of people buying $300K+ cars is miniscule, and rarely profitable, so we do not seriously anticipate changes in this area, with the possible exception of another Porsche Carrera GT.