Looks like Porsche is stepping a bit slower into its takeover of VW. Porsche Chief Executive Wendelin Wiedeking stated at a news conference recently “Our goal still is to initially increase our stake in VW as soon as possible to over 50%,” but it looks like this will likely not happen in 2008. Funny, Porsche CFO said the company isn’t willing to acquire VM shares at “economically absurd prices.” Guess the fuel behind the ride to the top was a double-edged sword.
You have to wonder how Porsche is doing these days given the economic downturn. They’re down 18% in the first four months of its fiscal year which started on Aug 1st. Definitely better than other carmakers such as GM. However Porsche is already taking steps to guard itself from disaster given what seems to be an almost certain bigger slump in sales. They’re closing factories for single days here and there to save costs and lower production a bit. Not a bad cost savings move.
Also interesting was their approach to helping suppliers in a credit crunch. BusinessWeek.com reported the following:
Wiedeking also expressed concern that some otherwise healthy Porsche suppliers are running into liquidity problems simply because they can’t get bank credit. Though Porsche isn’t lending suppliers money, it is paying them in advance and helping them in negotiations with banks, he said. “We have an interest in suppliers still being around tomorrow.” (Read More)
Living in the cut throat world of IT, I’ve never heard of a customer going to bat for a supplier like that. Course it is a more commoditized world. Still, I want a piece of that action.
Overall, the company appears to be healthy. Given the huge following Porsche has, its low annual production, and it’s profit margin (115% last fiscal year), I can’t imagine it will face what most of the other carmakers have faced. This perception is even more solidified by what I’m seeing for sale in the used Porsche market at the moment. Boxsters and Cayennes are EVERYWHERE and cheap. But the more classic 911 and derivative models are few and far between with no more than the usual killer deals coming along only every so often.