Audi to engineer next Porsche Cayenne

Audi will develop the Volkswagen Group's Porsche Cayenne, VW Touareg and Audi Q7 large SUVs in the future.

Currently, Porsche has responsibility for engineering the three models, which share the same underpinnings.

The decision to transfer development to Audi comes after Porsche was chosen instead of Audi to be the lead developer for large luxury sedans and sports cars within VW Group.

An Audi spokesman confirmed to Automotive News Europe German press reports that Audi will be responsible for developing the platforms of large SUV model lines within VW. 

"This decision was made in agreement with all of the brands involved and will create synergies throughout the group to the benefit of both the brand and the customers," the spokesman said.

A Porsche spokesman said: "This is not badge engineering. Porsche will be responsible for the engines and performance of the next Cayenne. It will drive like a Porsche and perform like a Porsche."

Audi will also develop Porsche's new small SUV, code-named Cajun, which will share its underbody with the Audi Q5, the Porsche spokesman said.

VW bosses hope the change will end a conflict over development responsibilities between the Audi and Porsche brands that has been ongoing since VW Group announced its plan to integrate Porsche as its 10th brand, according to the Financial Times Deutschland.

It will be several years before an Audi-engineered Porsche Cayenne reaches showrooms. The second-generation Cayenne went on sale earlier this year. A new-generation Volkswagen Touareg was also introduced this year.

The next Audi Q7 is due to go on sale in two years and its development is almost complete. 

VW has picked Porsche to develop the group's so-called "modular standard matrix" that will underpin the Porsche Panamera and future Bentleys. It will also be responsible for a sports car platform for front-mid- and rear-mid-engine cars for Porsche, Audi and Lamborghini.

Audi will continue to have responsibility for developing VW Group's so-called "modular longitudinal matrix," which was introduced in 2007 and underpins cars such as the Audi A4, A5 and Q5. 

VW brand is developing the “modular transverse matrix,” which debuts on the Audi A3 in 2012 and will eventually underpin about 40 models and 6 million units annually, including the next VW Golf.

VW is merging Porsche into its brand portfolio after VW acquired 49.9 percent of Porsche's car-making unit after Porsche last year failed in a hostile takeover attempt for VW.

Lamborghini sees sales dip before new supercar launch

Lamborghini ceased production of its high-performance Murcielago six months ago and will not see sales pick up again before the second half of 2011 with the launch of a successor supercar, its CEO said on Friday.

Lamborghini, a unit of Volkswagen AG's Audi, ended production of the $400,000 Murcielago in May in a move that is bound to hit full-year revenues, Stephan Winkelmann said in an e-mail to Reuters.

"This will surely have an impact on our sales performance. Compared with 2009, we will pay for the absence of the Murcielago this year," he said.

Founded in 1963 by Ferruccio Lamborghini, the company has been hit hard by the global economic crisis.

First-half sales fell 2.6 percent to 152.9 million euros ($216 million), despite continued growth in Asia, after dropping 41 percent to 281 million euros in 2009.

"In general terms, a return to the record levels seen in 2007-2008 will not be immediate, considering the slow demand from markets like Europe and the United States," Winkelmann said. "We see a recovery starting from the second half of next year." Lamborghini sold a record 2,430 cars in 2008.

The Murcielago, which is named after a fighting bull like its famous predecessor, the Diablo, and its cheaper sibling, the Gallardo, is Lamborghini's top-selling 12-cylinder car, with more than 4,000 delivered in nine years, of which 409 were sold in 2009. The last Murcielago left the company's base in Sant'Agata Bolognese, Italy, in May, for a Swiss customer.

Selling for up to 300,000 euros ($424,300) apiece, the Murcielago costs almost twice that of the Gallardo, now the company's only product on offer until the next supercar model is unveiled in Geneva in March 2011.

Looking ahead, Winkelmann said Lamborghini aimed to launch a new model every year and boost investments in new technologies.

A new initiative will be announced in Los Angeles in a couple of weeks, he said.

Lamborghini rival Ferrari, which reported third-quarter revenues of 446 million euros, up 12.6 percent from a year ago, is looking to post near record results for this year, the Fiat unit's chairman, Luca Cordero di Montezemolo, said in September.

Lamborghini predicts return to growth after H2 revenues fall 2.6%

Lamborghini, the Italian luxury sports car brand, remained cautious about 2010 when it posted a 2.6 percent fall in first-half revenues despite continued growth in Asia.

Lamborghini, a unit of Volkswagen's Audi brand, was severely hit by the recession last year, when sales fell 41 percent.

"2010 is a transition year for Lamborghini," CEO Stephan Winkelmann said in a statement on Tuesday, adding that market recovery and brand repositioning would help it return to growth.

The maker of supercars said revenues fell to 152.9 million euros ($199.9 million) in the first half when it sold 674 cars, down 18 percent.

Lamborghini cars range in price from 180,000 euros to 400,000 euros.

Car sales more than tripled in China, its second-biggest market after the United States, to 86 in the period. Lamborghini has said it expects to sell more than 100 cars in China in 2010.

First-half sales in Australia, Singapore, Hong Kong and Taiwan more than doubled.

The carmaker said it was heavily investing in the carbon fiber technology, which boosts power efficiency and helps reduce weight and car emissions.

Lamborghini competes head-on with Ferrari, owned by Italian carmaker Fiat.

VW makes ‘last attempt' to save Seat

Seat, Volkswagen AG's most unprofitable unit, aims to stem losses within five years and halt a flight of customers to rivals by expanding its model range and growing outside its Spanish home market.

“This is the last attempt for Seat as a brand, it would not be sensible to view things differently,” CEO James Muir said Wednesday in Hamburg. “If one would want to get rid of Seat, one would have to give the other party money to take it.”

VW named Muir, Mazda Motor Corp.'s former European chief, as Seat CEO last September after predecessor Erich Schmitt failed in his three-year effort to turn around the automaker. Concern about Spain's economy as a result of Greece's fiscal crisis may further hamper efforts to boost revenue from the unit.

Martorell, Spain,-based Seat's first-quarter operating loss of 110 million euros ($139 million) was more than double VW's two other unprofitable units, Bentley and commercial vehicles. Without a turnaround, Seat may endanger the German automaker's plan to become the largest automaker by 2018, analysts say.

“It will be difficult to turn Seat around,” said Marc- Rene Tonn, an analyst at M.M. Warburg in Hamburg. “Most of their sales stem from southern Europe where the crisis has hit small-car makers particularly hard.”

Falling new-car sales

Deliveries of Seat vehicles such as the Ibiza compact and Alhambra minivan fell 8.5 percent to 337,000 units last year. Spanish car sales slumped 21 percent in 2009, according to the Brussels-based European automakers association ACEA.

Spain's once-booming economy started contracting in the second quarter of 2008 and has taken six months longer than the 16-nation euro area as a whole to return to growth as households pay down debt. First-quarter economic expansion was 0.1 percent. Spain has the eurozone's highest jobless rate at 20.1 percent.

Standard & Poor's cut the country's credit rating on April 28, saying the government was underestimating its fiscal woes and overestimating growth prospects. Prime Minister Luis Rodriguez Zapatero said yesterday he will cut public wages this year amid pressure to rein in Spain's budget deficit.

“Seat is the undisputed trouble-spot in VW's brand portfolio,” said Stefan Bratzel, director of the Center of Automotive at the University of Applied Sciences in Bergisch Gladbach, Germany. “Solving the problems there may take years and a clear-cut remedy isn't in sight.”

Surpassing Toyota

Seat, which gets 56 percent of its sales from the Ibiza model, must expand its range of offerings for models such as the Leon compact and reduce its reliance on Spain, Muir told journalists during a roundtable discussion.

Fixing Seat will be key to plans by VW, which also makes Skoda, Audi and the namesake VW brand cars, to surpass Toyota Motor Corp. in profitability and deliveries in 2018.

As part of that target, Muir yesterday reiterated VW's goal of more than doubling Seat's sales to 800,000 vehicles. Wolfsburg-based VW posted record sales last year of 6.3 million units.

“It seems to me that VW hasn't fully committed itself yet to the brand image of Seat,” said Mike Tyndall, an automotive analyst at Nomura Securities in London. “At some point they wanted Seat to be the sporty brand within the VW family, but some of the model decisions don't add up.”

VW Chief Financial Officer Hans Dieter Poetsch said March 11 that a “comprehensive program” of cost cuts was under way to return Seat to profit after the unit's operating loss in 2009 quadrupled to 339 million euros. The goal is to trim fixed outlays by raising capacity utilization, he said.

Martorell plant gets Audi SUV

To that end, VW will build Audi's new Q3 compact SUV at Seat's main plant in Martorell, near Barcelona, beginning next year, with a goal of making 80,000 vehicles a year. The factory, which can produce 500,0000 vehicles per year, has a capacity utilization of 60 percent currently, Muir said, adding that he needs to reach 90 percent to hit the breakeven point.

“Our clear focus over the next three years will be to improve utilization,” Muir said. “One cannot solely rely on cost reductions to make Seat profitable.”

Muir has made his own missteps since taking over Seat, running into resistance from the German carmaker's labor leaders after announcing plans to lay off about 300 workers. He later backed away from that plan after works council chief Bernd Osterloh criticized his efforts, saying cost reductions weren't enough to save Seat. VW has owned Seat since 1986.

Worker representatives hold half the seats on VW's supervisory board and have played a crucial role in the past in ousting executives that tried to cut jobs, including former VW CEO Bernd Pischetsrieder.

“I'm coming from outside the company straight into the CEO position,” Muir said. “That's a sign that there is a certain frustration about Seat at VW.”

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Porsche, VW May Be Dubbed 'Auto Union'

As Porsche and Volkswagen work out details of their eventual merger, Reuters reports the companies may resurrect the Auto Union name. The moniker was previously used in the 1930s for the company that evolved into Audi.

Porsche and Volkswagen continue to work on a deal.

Porsche and Volkswagenhave broadly agreed on sale terms, and the name Auto Union may be resurrected, Reutersreports.

The new entity could be led by Volkswagen CEO Martin Winterkorn, and Porsche would retain some independence — similar to Audi's setup within the Volkswagen Group. Porsche would be the 10th brand in the company.

VW would buy up to 49 percent of the Porsche sports-car business, the first step in an integration of the two companies that would be completed in 2011, according to Reuters.

Auto Union is a famous name that dates to the 1930s, and its cars were legendary racers. The company has since evolved into Audi.

The sale is a reversal after Porsche's attempts to take over its much larger rival, VW, failed.

Baby Audi’s a Mini marvel

Ultra-efficient city car takes firm into new territory – and could be the true spiritual successor to the Mini!

IT’s the all-new Audi that claims to pick up where the original Mini left off! This is the E1 – an ultra-efficient city car from the German firm and a model which is being hailed as a spiritual successor to Alec Issigonis’ masterpiece.

Sharing its platform with VW’s forthcoming up!, the newcomer takes Audi firmly into new territory. It’s designed to sit below the Polo-based A1 – due next year – as the entry point into its model line-up, and is aimed at the likes of the new Fiat Topolino and MINI Spirit (revealed in Issue 1,056). Signifying the launch of a new wave of hi-tech Audis, the E1 goes on sale in 2011 and will be the first car from the company to wear the ‘E’ tag.

It will be closely followed by a full range of E-badged models over the next five years. And with a hybrid version of the A1 due shortly after the standard supermini’s 2010 launch, Audi is clearly readying itself for an assault on the eco-friendly small-car market.

However, despite its diminutive size, the E1 will remain a premium product that fits in with the brand. Although its proportions are reminiscent of those of the VW up!, the familiar mesh-styled grille, short overhangs and huge front badge make the electric three-door instantly recognisable as an Audi. Futuristic front and rear LED light clusters, large alloys and a sharply rising waistline that meets a neatly kicked-up C-pillar complete the E1’s look.

Inside, buyers can anticipate more of the same, with a cabin that boasts the usual premium levels of material quality but with a more creative design. As previewed on the A1, the E1 will get a development of Audi’s new mobile device – essentially a hand-held portable sat-nav, phone and MP3 player with touchscreen display. The gadget replaces the key and plugs into the centre console.

The E1 will be packaged similarly to Toyota’s iQ, which means customers can expect a 2+1 layout with plenty of room up front and enough space in the back for luggage or one small passenger.

A variety of engines will be offered, although the star of the show will be an electric powerplant. It incorporates lightweight lithium-polymer batteries and a punchy electric motor driving the front wheels.

So the small, agile car will be ideal for city motoring, delivering 0-60mph in around 10 seconds. And with a full charge providing enough energy to travel up to 100 miles helped by regenerative braking, the plug-in machine will have real all-round ability.

In addition to the electric variant, there will be petrol and diesel versions, using new 600cc two-cylinder turbo units. These will aim to offer sub-100g/km CO2 emissions and economy of 94mpg. A 1.2-litre three-cylinder petrol is under consideration, too.

The E1 will be built at VW’s plant in Bratislava, Slovakia, alongside the up! as well as Skoda and SEAT variants. Audi’s version will carry a price tag of around £12,000, which will pitch it against rivals such as Smart’s electric ForTwo and Fiat’s forthcoming hybrid 500.

The electric E1 will be eligible for a Government grant worth up to £5,000 which will be made available to all buyers of electric cars and hybrids from 2011.

Porsche plans coup against Piech

Porsche Chairman Wolfgang Porsche has gained majority support among the two clans that own his family's carmaker to remove cousin Ferdinand Piëch from his post as Volkswagen chairman, a German magazine reported.

"It is not a question of 'if', rather 'when' and 'how'," Focus quoted one Porsche manager as saying.

The news magazine report ahead of its publication on Monday comes after a turbulent VW supervisory board meeting on Friday, where Piëch broke ranks with the other three Porsche representatives on the board.

Porsche had been quoted in comments made yesterday to Focus as saying of Piëch: "I am horrified by the behavior of the chairman."

The challenge is the result of long-running tensions between Piëch, part owner of Porsche, and his cousin over control of Volkswagen -- their company's largest investment in which the sports car maker is poised to take the majority this year.

Piëch, who has run Audi and Volkswagen as CEO before taking over as chairman in 2002, is a calculating strategist who has survived several coup attempts.

His power base stems from close allies like VW CEO Martin Winterkorn and the unwavering support from VW's powerful unions, which oppose Porsche's attempts to limit their influence.

Volkswagen declined to discuss the report while Porsche was not immediately available for comment.

Versace to design Lamborghini bags, interiors

Versace has agreed to design the interior of a limited edition Lamborghini car and its accompanying accessories like gloves and bags in the latest collaboration between the two luxury brands. The Italian fashion house will design the interior of the Murcielago LP640 Roadster, a joint statement said on Monday at Milan's fashion week for men.

The cars, whose interiors will be fitted with black and white leather, will be made on demand so the number to be produced has yet to be determined, a Lamborghini spokeswoman said. The accessories, which also include trolleys and suitcases, will go on sale in Versace and Lamborghini stores by November.

Versace began collaborating with Lamborghini about two years ago. It designed the interior of a limited edition Murcielago coupe and later worked on another Lamborghini car that went up for auction at a charity event.

Working with Versace is part of the luxury sports car maker's strategy to raise its profile and make money through the franchising of its brand.

Although it is based in Sant'Agata Bolognese, Lamborghini is owned by Audi, a unit of Volkswagen of Germany