German luxury sports car maker Porsche said Wednesday it would push back a planned takeover of Volkswagen, the biggest European auto group, after being hit by falling sales.
“In view of the current economic climate it is more and more unlikely that we will achieve the goal this year” of raising its stake in VW from the current 42.6 percent to more than half, Porsche chief Wendelin Wiedeking said.
“Our aim remains to increase our stake to over 50 percent… as quickly as possible. But we have always said that we would not do anything unreasonable,” he told a news conference in southwestern Stuttgart.
Wiedeking said his goal was to build “a global alliance” able to resist the financial and economic crisis, “because the world is not going to be simple.”
“In the past weeks, dramatic changes have taken place in auto markets,” he noted.
Porsche estimated that its unit sales had dropped by 18 percent to 25,200 vehicles in the August-November period compared with the same period a year earlier.
Revenues were also expected to have lost 15 percent in the same period to “slightly more than two billion euros” or 2.6 billion dollars, the car maker said.
Porsche now expects full year 2008/2009 sales to be “markedly” lower than the previous year's record of 98,650 vehicles.
Finance director Holger Haerter painted a bleak picture of the auto sector, saying knock-on effects of weak sales meant that “a fundamentally healthy parts supplier could become a candidate for bankruptcy from one day to the next.”
Another factor delaying a VW takeover is the recent wild swings in its share price that stemmed from speculation in the run-up to Porsche's final move.
In late October the price of VW shares shot up to 1,005 euros, making the biggest European carmaker briefly the world's most valuable company by market capitalisation.
“We are not ready to buy VW shares at ridiculous prices,” Haerter said.
At more than 200 euros there is not much sense “from an economic point of view” in buying Volkswagen stock, he added.
And, Haerter said: “The global economic crisis and its consequences for the automobile sector must not be forgotten” when mulling an increase of Porsche's stake.
The maker of the 911 sports car confirmed it was aiming for a VW holding of 75 percent next year, but its shares are considered overvalued at present by analysts.
Porsche shares gained from the announcements on Wednesday, adding 3.4 percent to 54.58 euros in afternoon over-the-counter Frankfurt trading.
VW was up by 3.76 percent at 264.87, while the DAX index of leading shares had lost 2.52 percent overall.
“Porsche has every interest in maintaining its freedom and waiting for it to fall,” auto specialist Stefan Bratzel told AFP in reference to the VW share price.
“Several billions (of euros) are at stake if they buy at the wrong time.”
BHF Bank analyst Albrecht Denninghoff added that “the status quo is completely favourable for Porsche.”
It is in a strong position at VW despite union opposition to a takeover, and profits from its VW share dealings earned much more for Porsche in 2007/2008 than did sales of its sports cars.
