Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Blogs
Blogs
October 26, 2010 01:00 AM

VW 'can do almost anything' with its huge war chest

  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Paul McVeigh is managing editor of Automotive News Europe.

    A skeptical Automotive News Europe reader commented that Volkswagen's quest to topple Toyota as the world's No. 1 car company will bankrupt the German automaker. That won't happen soon, or likely ever.

    VW has a cash pile of 19.6 billion euros ($27 billion), 9 billion euros more than at the start of the year. The cash surplus was boosted by record sales of 5.4 million new cars in the first nine months. The company expects 2010 unit sales to exceed last year's record level of 6.3 million cars, driven by high growth in China and booming sales at its Audi premium brand.

    VW may use some of its huge "war chest" to achieve its target of selling 10 million vehicles earlier than its stated goal of 2018. It could, for example:

    • Raise its stake in Suzuki to a controlling 51 percent, allowing it to consolidate Suzuki's car sales into its own. VW paid $2.5 billion in January for a near 20 percent stake in the Japanese automaker, whose unit sales were nearly 1.2 million last year.

    • Buy Porsche outright. VW purchased a 49.9 percent stake in the sports car maker for 3.9 billion euros from owner, Porsche Automobil Holding SE, which has 6 billion euros of debt resulting from its failed attempt to take over VW. Europe's largest automaker has an option to buy the remaining 50.1 percent for another 3.9 billion euros. The purchase would add 150,000 annual sales, if Porsche reaches its goal of selling that many cars.

    • Relieve Fiat of its money-losing Alfa Romeo brand, valued at up to 1 billion euros. Fiat CEO Sergio Marchionne plans for Alfa to become profitable by 2014 selling 500,000 cars, up from 102,000 last year. Marchionne says he won't sell Alfa, which Fiat acquired in 1986 to prevent Ford from buying it, but a cash offer from VW might prove hard to refuse.

    "VW is generating enough cash to buy Alfa Romeo once a quarter ... VW can afford to do almost anything," Bernstein analyst Max Warburton wrote in a research note.

    Are there any darks clouds on the horizon to console VW's rivals? Not at the moment, it seems. “VW is well positioned and faces no concrete risks for a notable weakening of its business,” wrote Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler.

    RECOMMENDED FOR YOU
    Why Ferrari will keep making V-12s for as long as possible
    Recommended for You
    Ferrari Purosangue rear 2023
    Why Ferrari will keep making V-12s for as long as possible
    Evangelist graphic
    Why it helps CTOs to be 'a kind of evangelist'
    Mazda MX-30 plug-in hybrid world debut Brussels show 2023
    Brussels auto show could rise to level of dented Geneva
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us