- The VW Group is reportedly exploring a listing of Porsche.
- A Porsche listing could raise billions for VW to put toward electrification.
- Experts said the move makes sense — but VW should move fast.
This week, German media reported that the VW Group is considering a separate listing of Porsche, the crown jewel in a sprawling automotive empire.
Manager Magazin broke the news, citing sources with knowledge of the discussions. “The magazine said Volkswagen could list as much as 25% of Porsche AG, a stake that could be valued at 20 billion to 25 billion euros ($24-$30 billion),” Reuters reported. Bloomberg also reported the potential move.
The compelling precedent here is Fiat Chrysler Automobiles’ 2015 public offering for Ferrari. The Italian luxury carmaker now has an independent market capitalization of $35 billion.
That $35 billion looks impressive, and it is. But Porsche could set a different standard. Ferrari sells only about 10,000 vehicles a year – by design, to maintain exclusivity for the brand. Porsche in 2020 sold over 270,000. Lutz Meschke, Porsche’s CFO in 2018, suggested the carmaker could be worth more than $80 billion, if it were completely separated from the VW Group.
Raising cash to go electric
As the global auto industry undertakes a shift from gas-powered machines to electric vehicles, big carmakers are trying to raise cash to fund the transition. That’s probably the VW Group’s motivation for considering a Porsche spinoff.
"Sounds like a good idea," Bob Lutz, a former top auto executive who worked for General Motors, Chrysler, and BMW, told Insider.
He added that VW should "realize the staggering value" of Porsche while it's still there.
"With imminent electrification, Porsche's excellence in internal-combustion engine design becomes valueless," he said.
Porsche has waded into the electric waters, releasing the compelling Taycan EV last year. But the company continues to sell a lineup of lucrative, high-performance, gas-powered sedans, SUVs, and sports cars, including the iconic 911, whose eighth generation launched last year. That eight-decade investment could now be heading for irrelevance, so investors have a limited window to reap Ferrari-grade gains from a Porsche listing.
"A spinoff would generate a lot of fast cash for VW while giving Porsche's substantial, and wealthy, fanbase a sense of ownership in the company," Karl Brauer, executive vice-president and publisher at CarExpert.com, said. "There's really no downside."
Tricky business
Porsche and VW have an intricate ownership structure, however. The main shareholder in Porsche AG - Porsche SE - owns roughly a third of the VW Group. The relationship dates to the middle of the 20th century. Ferdinand Porsche created the original Volkswagen Beetle, the "people's car" of Germany that went on to sell millions of units worldwide.
In 2008, Porsche undertook a takeover of VW that ultimately failed, leading to the current ownership arrangement and to merged manufacturing operations.
Brauer acknowledged the fraught history of the Porsche and VW clans, and said it could work if "VW structures the deal in a way that eliminates the possibility of another Porsche uprising within that complex family history."
Lutz indicated that VW could maintain a 25% ownership stake of an independently-listed Porsche, what he termed a "blocking minority," giving VW veto power for future decision making. And Porsche would be able to continue to share engineering and technical resources with VW.
