In a white paper published in late 2005 entitled ‘Porsche and the Art of Cuckoo Nesting’, Trend Tracker analyst Michael Wynn-Williams predicts Porsche’s new business strategy in taking control of VW.
In the controversial white paper, Wynn-Williams argued that Porsche did not need to show VW how to run its operations, but develop a strategy that secured access to VW’s numerous resources.
The European Union declared yesterday that Volkswagen scrap a German law which protects it from hostile takeovers.
With recent developments between VW and Porsche, Wynn-Williams says Porsche appears to be poised for one of the biggest upsets in automotive industry history as it readies itself to take a controlling share in VW.
Porsche now holds 27.4% of the mass market producer, dangerously close to the 30% that would give it full control.
Porsche is capitalising on its cash mountain; even after investing in VW it still has almost €2bn (£1.34bn) banked away, according to Wynn-Williams.
Porsche is rich enough to fund its own new model programmes while simultaneously toying with its giant relative. VW, meanwhile, is fighting its way out of a financial predicament, trying to bring down the operational costs of its expensive German factories and clawing its way back into the market.
Wynn-Williams said: “It is undeniable that Porsche is highly profitable, but it has also been very canny. After courting disaster in the early 1990s when yuppies stopped buying 911s, the move down market with the Boxster saved the company.
“However, new vehicle programmes are a huge burden to any company so for its SUV programme it entered into a joint venture with VW and persuaded its partner to carry most of the costs.
The Porsche Cayenne became a cash cow for Porsche, money which it could then use for its own projects. By installing itself in the VW boardroom, Porsche can now demand joint ventures at will and constructed to its own advantage. Porsche is not taking over VW, just the money supply.”