A few days ago, volkswagen group announced that volkswagen and porsche holding boards have reached an agreement to ensure that porsche and volkswagen group will be listed independently, porsche and volkswagen group will go their separate ways.
Wall Street estimates that if Porsche goes public independently, it will be valued at between 60 billion and 85 billion euros, while the Volkswagen Group is currently worth around 112 billion euros, which is likely to become one of the largest IPOs (initial public offerings) in Europe.
Independent listing can achieve "win-win"
Looking back at the history of Porsche and the Volkswagen Group, Weckle discovers that there is a delicate relationship between them. In the 1930s, the Porsche family was the main shareholder of Volkswagen, but Volkswagen was a shareholder of Porsche at the time. Under the German Commercial Code, shareholders held 75% of the shares to gain control of a German company, and under the Volkswagen Law at the time (yes, a state-owned car company had a law specifically for it), shareholders needed to hold more than 80% of the shares to gain control of the Volkswagen Group.
The Porsche family, which owns only 31 percent, was unable at the time to gain control of Volkswagen.
In 2007, the Volkswagen Act was overturned, and Porsche bought a large number of Volkswagen shares in the market in the following years, but because it only held 74.1% of Volkswagen shares at its peak, it not only failed to control Volkswagen, but also ended up with a 49.9% stake bought by the Volkswagen Group. Three years later, Volkswagen acquired Porsche in its entirety, making Porsche a sub-brand of the Volkswagen Group.
You know, Porsche has always been a cash cow for the Volkswagen Group. According to the latest official earnings report, Porsche's sales profit in the first three quarters of 2021 reached 3.6 billion euros, an increase of 78.4% year-on-year, exceeding its 15% return on sales target, and it is also one of the most profitable car manufacturers in the world.
Volkswagen Group's profits rebounded last year, but among its sub-brands, the main source of profit is Porsche, Volkswagen, Audi and Skoda, which have higher returns on operating sales, while sub-brands such as Ducati and Lamborghini have lower profit margins and even losses.
In the view of Brother Rudder, the independent listing of Porsche is the result of a win-win situation between volkswagen group and Porsche.
For the Volkswagen Group, Porsche "going solo" is not entirely a bad thing, Volkswagen Group can monetize the Porsche stock in hand to deal with its biggest competitor at present, Tesla. You know, Volkswagen once admitted that Tesla is 10 years ahead of itself in manufacturing electric vehicles and developing software, in order to shorten the gap of these 10 years, Volkswagen has invested hundreds of billions of dollars to promote the electrification process.
For Porsche, an independent listing means that the brand will be self-financing, and if it can develop steadily, it can be attributed to more social resources. According to the official 2025 strategic plan, Porsche will realize that 1 in every 4 Porsche sports cars is equipped with a new energy power system by 2025, and gradually launch pure electric vehicles. In terms of funds, Porsche will invest 6 billion yuan to dedicate to the development of plug-in models and pure electric models.
In terms of products, Porsche already has a pure electric vehicle of the Taycan, as well as a number of hybrid models, the next generation of Porsche Macan will also become a pure electric model, porsche 911 will be the last model with pure electric drive.
Porsche will rely more on the Chinese market
Externally and internally, Porsche, which has lost the protection of the Volkswagen Group, will become more dependent on the Chinese market. From the Porsche 911 to the Porsche Cayenne to the Porsche Taycan, Porsche has been working in the Chinese market for more than 20 years, which has long been the main battlefield of Porsche and has become the largest single market in the world for seven consecutive years.
Official data show that Porsche's new car deliveries in the Chinese market last year reached 95,671 units, an increase of 8% year-on-year, accounting for 32% of the total global sales, of which the delivery of electrified new cars accounted for 18%, an increase of 8% year-on-year, which is difficult for other traditional luxury car companies such as Mercedes-Benz and BMW to achieve.
Specific to the model, the annual sales of the Porsche 911 increased by 67% year-on-year, the Market demand for the Porsche Panamera was strong, the delivery volume increased by 26% year-on-year, and the Panamera delivered in the Chinese market exceeded half of the total sales of the global Panamera. It is worth mentioning that Porsche's first pure electric sports car, the Taycan, set an annual delivery record of 7315 units last year and launched four derivative models in the Chinese market.
Looking back at its electrification product planning, Porsche has launched up to 16 new energy vehicles in the Chinese market, forming a very comprehensive electrification product matrix. In order to expand the car experience of car owners, Porsche continued to expand its charging network last year, including home charging, third-party charging, destination charging, and also greatly promoted supercharger technology. At the digital level, Yan Boyu, President and CEO of Porsche China, believes that what is suitable for Germany is not necessarily suitable for China, and autonomous driving and digitalization are the focus of Porsche's future research and development in China. It is not difficult to foresee that Porsche will introduce more advanced technology such as assisted driving in the future.
At the strategic level, Porsche's digital strategy and investment in the Chinese market is also greater. According to the plan, Porsche will invest about 10 billion euros in electrification and digitalization, of which 90% will be invested in the research and development of electrification and investment in electrification-related tangible assets, and the remaining 10% will invest in the digitalization of cars, and there will be more localization actions adapted to the Chinese market.
Brother Reed learned that the Porsche Macan T, which is positioned between the Porsche Macan and the Porsche Macan S, will open pre-sales in the Chinese market, with the manufacturer retail price of 618,000 yuan. Compared with the 2.9L V6 twin-turbo engine mounted on the Macan S, the Macan T's powertrain weighs 58.8kg less on the front axle, and the car's starting and cornering capabilities will be better, while the multi-function GT heated steering wheel and the Sport Chrono timer on the dashboard are also standard equipment of the Macan T, which is expected to make its Asian debut at this year's Beijing Auto Show.
An independent listing means that Porsche will have full decision-making power, and it is an answer worth looking forward to as to how much surprise it can bring to consumers in terms of products, impacts and services. In the rapidly developing automotive industry, can Porsche continue to maintain its current steady growth?