VW’s plans to take over Porsche got a boost as the sports car company’s CEO was pushed out by his board. Wendelin Wiedeking leaves Porsche with a severance package worth $70 million.
Porsche plans to take investment capital from Qatar, but that is only part of a staged transaction to become part of VW, the largest car company in Europe. VW will probably buy 49% of Porsche later this year and the balance soon thereafter.
VW clearly has aspirations to become the world’s largest car company, which puts it on a collision course with Toyota (TM). The only other legitimate competitor for the No.1 spot was GM and the firm was partially dismantled as it went through Chapter 11.
VW is already one of the most successful foreign car companies in China, the world’s largest car and light vehicle market and one of the fastest growing. It is also clearly a success in Europe and does well in the Latin American market too. To challenge Toyota, VW will have to be a success in the US, where its market share is only about 1% compared to the Japanese firm’s 16%.
VW lost its chance to quickly get a large piece of the American market when it let the assets of Chrysler fall into Fiat’s hands. VW may have viewed any attempt to resurrect Chrysler as being too risky. The sales of the No.3 US car company have been falling at a breathtaking rate.
VW is left to try to move into the US with its own products and dealership network. That means that the process will take years. VW’s attempt to become the leading car company in the world may stall because it was not willing to take the gamble of owning Chrysler.
Douglas A. McIntyre
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