Audi, Porsche to join Formula One, VW CEO says

BERLIN -- Volkswagen Group's premium brands, Audi and Porsche, will join Formula One after convincing the German automaking group that the move will bring in more money than it will cost, VW Group CEO Herbert Diess said.

Discussions by the board of directors about the two brands' plans had created some divisions, Diess said at an event in Wolfsburg, where VW is headquartered.

But ultimately the brands, which next to VW's China business are the group's most important income suppliers, made the case that they would pull in more money for the group with an F1 commitment than without one,  Diess said.

"You just run out of arguments," he said.

In addition to the brands' economic argument, F1's high advertising impact was apparently also convincing.

"According to both premium brands, Formula One is the most important lever to boost brand value," Diess said. "With the plans for a bigger presence in China and the U.S., the attraction as the biggest motor-racing spectacle is only going to grow."

Both Porsche and Audi have started work on F1 engines, he said.

Porsche's preparations are a little more concrete than Audi's, Diess said. Porsche will reduce other racing activities and concentrate more on that circuit, he said.

Audi is ready to offer around 500 million euros ($556.30 million) for British luxury sports carmaker McLaren as a means to enter, a source told Reuters in March, while Porsche intends to establish a long-term partnership with racing team Red Bull starting in several years' time.

VW Group last month said its supervisory board had backed plans for the brands to potentially join F1 as early as 2026. Porsche and Audi will provide further information on the details at a later date, a VW spokesperson said.

VW Group is preparing for a possible listing of Porsche in the fourth quarter of this year.

Bloomberg contributed to this report