Black, Automatic, Powerlock,window,nav,sunroof, on 2040-cars

Auto blog

Porsche-Piech buy 10% stake in VW's holding company

In August, 2009, as the scuttled merger of Porsche and Volkswagen had gone bad and Porsche was backed up against the ropes, Porsche Automobil Holding SE (PAHSE) relinquished a ten-percent stake in itself to Qatar Holdings as well as options it held on 17 percent of VW shares. The sale meant that, for the first time since the founding of the company 61 years before, an entity outside the Porsche and Piech families had a say in the running of PAHSE.
Buying that ten-percent stake back returns full ownership to the two families, the holding company's sole possession being ownership of 50.7 percent of VW's common shares. The price paid wasn't disclosed, but at market rates the purchase would be worth close to $1.25 billion. Qatar intends to hold onto the 17-percent stake it has in Volkswagen.

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.

VW will delay projects to cope with diesel scandal

Volkswagen's diesel emissions scandal will require the sacrifice of far more than just executives and money. It's also going to result in the cancellation of various projects, a process that new CEO Matthias Mueller said "won't be painless." "We will review all planned investments, and what isn't absolutely vital will be canceled or delayed," Mueller said while addressing the embattled company's employees. The former Porsche boss also said the money set aside by the German giant – about $7.29 billion – won't be enough to cover recall expenses, fines from governments in affected countries, and the expected deluge of lawsuits from disgruntled TDI owners. According to Bloomberg, that figure probably won't even be enough to match the fines Uncle Sam is likely charge, pegged to be around $7.4 billion, according to one analyst. It's expected that VW could delay a further push for share in the North American market, which would include a $1-billion investment in its Puebla, Mexico, factory. But it will take more than cancellations and delays, analysts claim. "It's going to be tough to find projects they could chop that will actually move the needle," JPMorgan Chase's Jose Asumendi told Bloomberg. "What they really need to do is get costs under control." That, according to Bloomberg, is already setting up a showdown between management and labor. The latter wants a reduction in VW's $17.4-billion research-and-development budget – the world's largest and more than what Ford and General Motors spend combined – while the former wants to slash personnel costs. Bloomberg also spoke to analysts who claimed the company should look into reductions in purchasing costs as well as trimming sponsorships. It's impossible to know just how extreme Volkswagen will need to get with cancellations, delays, and cost-cutting, but it's becoming increasingly clear that the effects of this scandal will likely be felt far longer than the controversies that surrounded other automakers like General Motors and Toyota. Related Video: News Source: BloombergImage Credit: John Macdougall / AFP / Getty Images Earnings/Financials Green Plants/Manufacturing Recalls Volkswagen Diesel Vehicles vw diesel scandal matthias mueller