Last year, Porsche pulled off the extraordinary coup of making £8.6 billion of profit on revenues of £7.5 billion. It was already the most profitable car company in Europe, but this was a feat admired by golden egg layers and producers of wine from water.
Next week Porsche has its annual meeting at which it will have to make a trading statement owning up to the extent to which its car sales are declining and the extent to which its profit margins are shrinking.
It will be quizzed by shareholders about the degree to which its share-trading options are exposed to a decline in the share price at Volkswagen. And it will need to be clear about the cost of the debt it incurred in buying those VW shares.
It started buying VW shares, it says, because it needed to be sure that its vehicle development partner would not leave it in the lurch. Masterful though the Porsche product was, there were other carmakers in a position to challenge its technical supremacy.
Porsche had to spend hard to stay ahead, and negotiate hard to get at least one other volume carmaker to share the cost of the mundane tasks in carmaking.
One of the most mutually beneficial collaborations was the parallel development of Porsche Cayenne and the
Smome sources claim that the choice of VW was second best after Porsche had been spurned as a partner in the development of the Mercedes-Benz M-Class.
If that is true, it makes more sense of the extraordinary lengths that Porsche has gone to in order to secure its partner.
- Read this story in full in the 23 Jan 09 issue of AM. To subscribe to AM magazine click here or call 01733 468659.