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.

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.

Wiedeking's future is in the balance

Porsche's plan to merge with Volkswagen has intensifed a power struggle that could see the spectacular fall of the sports car maker's CEO Wendelin Wiedeking.

The German press says that Wiedeking faces his Götterdämmerung after his plan for Porsche to take control of Volkswagen, a company 15 times Porsche's size, was abandoned.

Laden with debts of 9 billion euros ($11.99 billion) from its acquisition of 51 percent of VW shares, Porsche Automobil Holding on Wednesday halted its original plan to seize control of VW, which is Europe's largest automaker, by raising its stake to 75 percent.

Instead the Porsche-Piech clan, which controls Porsche, wants to merge their Stuttgart-based sports car business with VW under a new holding company. Porsche would become the 10th brand in VW group alongside units such as Scania trucks, Skoda, Seat, Bentley and Lamborghini.

Winterkorn favorite

It's not clear who will run the new company. German press reports say VW group CEO Martin Winterkorn, 62, is favorite because Wiedeking has made too many enemies with his outspoken attacks on the way VW is run.

“Wiedeking has broken too much china,” said Stefan Bratzel, head of the Centre of Automotive Research at the University of Applied Sciences in Bergish-Gladbach, Germany.

Winterkorn also is a protege of VW Chairman Ferdinand Piech, who wants Wiedeking and Porsche's Chief Finance Officer Holger Haerter to be fired for amassing huge debts at Porsche, according to German media reports.

Wiedeking admits that a merger with VW is not what he hoped for. “It's not a marriage made in heaven, more a marriage of convenience,” Wiedeking told Porsche's 3,000 employees in Stuttgart on Thursday.

When Porsche first began building up its stake in VW in 2005, Wiedeking upset Wolfsburg's powerful trade unions by calling for “sacred cows” to be slaughtered.

He challenged VW's labor agreement that pays the company's German workers above the industry average and called for the abolition of the so-called VW Law. The law gives the north German state of Lower Saxony where VW is based a blocking minority on strategic decisions because it has a 20 percent stake in VW.

Wiedeking also upset Piech by criticizing as cars, which the VW patriarch had championed, such as the Bugatti Veyron and VW Phaeton.

Until the extent of Porsche's debts became clear in recent weeks, Wiedeking, 56, had seemed untouchable.

He was praised as one of the auto industry's brightest stars after turning Porsche from a bankruptcy candidate into the world's most profitable carmaker. His salary of 80 million euros last year made him Germany's highest paid boss.

Wiedeking loses key ally

Now some of Wiedeking's staunchest supporters are distancing themselves from him.

Porsche's labor boss Uwe Hueck was previously a key ally of Wiedeking's in challenging VW's trade union leaders and the VW Law. Hueck now says he wants a similar law at Porsche to protect its workers..

“I am concentrating on the workforce, the bosses are secondary,” Hueck said.

Porsche's workers are disillusioned. “Porsche is finished. We're VW now,” one worker told reporters at the factory gates.

Lower Saxony and VW labor leaders have threatened to block a VW-Porsche merger unless they win key concessions.

Lower Saxony Premier Christian Wulff insisted on maintaining the state's blocking minority stake, two seats on the supervisory board, and a veto on plant closures. He added that a merger was by no means a done deal.

VW's employee leaders said labor should continue to have a major say in how the new company is run.

Porsche will struggle to dictate terms of how the new company will look, analysts and bankers close to the deal say.

"Volkswagen and Lower Saxony are now in the driver's seat," Credit Suisse analyst Arndt Ellinghorst said on Thursday. "Porsche needs VW's cash, and VW doesn't need Porsche's debt."

Porsche 911 GT3

The Series 2 997 GT3 performance car is unveiled

Porsche has revealed the new 911 GT3. It’s the second 997 iteration of our favourite real-world 911, but it’s more than just a mere facelift.

The headline news sits at the very back of the car. The engine is new; still a flat six, but up to 3.8 litres with power hiked 20bhp to 429bhp. Mid-range torque is also improved by tweaking cylinder head gas flow. It means performance gets a shove in the right direction: 0-62mph now takes 4.1sec, 99mph arrives in 8.2sec and top speed is up slightly at 194mph.

Porsche has also made moves to make this the hardest and most dynamic GT3 yet. There’s a new version of PSM (Porsche Stability Management) that allows the stability and traction control systems to be turned off completely. The rather similar sounding PASM (Porsche Active Suspension Management) boasts stiffer springs and anti-roll bars in sport mode but a more compliant ride for everyday use in its normal setting.

There’s modified aerodynamics with front and rear downforce boosted and boasts that overall air pressure pushing down on the car is more than twice that of the current 997 GT3. There are larger yet lighter brake discs that help lessen unsprung weight, which is also reduced via new, lighter alloys. PCCB (or if you prefer, ceramic brakes) is on the options list, with a version of the acclaimed braking system designed specifically for the new GT3.

There are options for the many 911 buyers who take their cars on the track, too. They can specify PADM – yet another acronym that basically stands for engine mounts. The regular, ‘elastic’ engine mounts can be replaced with harder, more resistant ones which reduce the effect of mass forces from the rear-mounted drivetrain, improving traction through bends and when accelerating. Also on the options list is a front-axle lift that raises ground clearance by a useful 30mm for bumpy surfaces and for aid in clearing inconvenient speed humps.

Not on the options list is PDK, Porsche's double-clutch gearbox. For now at least the GT3 is a manual-only car.

The mk2 997 GT3 will debut at the Geneva motor show on March 3, with UK sales kicking off in Autumn 2009. Prices start at £81,914, a rise of about £1300.

Porsche raises stake in VW to over 50%

Germany's Porsche Automobil Holding has raised its stake in Volkswagen to more than 50 percent, triggering a mandatory takeover offer for Sweden's Scania as a result.

Porsche's purchase of further ordinary shares in Volkswagen means it now holds a 50.76 percent stake, Porsche said on Monday. It held 42.6 percent previously.

The additional stake of 8.16 percent was worth about 6.1 billion euros ($8.49 billion) on the stock market on Monday, according to Reuters calculations, considering that Volkswagen shares closed at 254.74 euros, down 1.7 percent.

Porsche had initially planned to raise its stake above 50 percent by the end of last year, but a massive short squeeze in late October briefly made VW the world's most valuable company, when its share price rocketed to just over 1,000 euros from 210 euros in two trading sessions.

Porsche's Chief Financial Officer Holger Haerter hence said in November it was "increasingly unlikely" that Porsche would take majority control by the end of December, but added he expected to do so by early 2009 at the latest.

A Porsche spokesman confirmed that the sports car maker still planned to increase its stake in VW to 75 percent at some point this year, given a favorable market environment.

As a result of its stake hike on Monday, Porsche now has indirect control of Swedish truck maker Scania, in which Volkswagen holds about 69 percent of the voting rights.

Porsche is required by Swedish law to make a mandatory takeover offer, but the German sports car maker said it had no strategic interest in Scania and was not interested in acquiring Scania shares.

It said it was not bound by pre-acquisition prices and was only obliged to offer the minimum price prescribed by law.

In December, German industrial conglomerate MAN underscored its long-term strategic interest in Scania, saying it had bought call options on Scania's stock, giving it access to more than 20 percent of Scania's voting rights.

The deal marked another step toward a three-way truck deal that analysts expect to emerge among MAN, Volkswagen and Scania.

Volkswagen is the biggest shareholder in both MAN and Scania.

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.

Porsche set to move closer to VW takeover

Porsche will be one step closer to acquiring majority control of Volkswagen on September 2, when its deal to buy 4.9 percent of that company's ordinary shares takes effect.

The VW takeover "will be executed piece by piece," Porsche CEO Wendelin Wiedeking said during an event in the Black Forest on Wednesday evening.

A spokesman for Porsche said the deal closes on that day in early September.

The purchase of another 4.9 percent of VW common shares was necessary before Porsche could proceed with gaining regulatory approval from the European Commission, which required further proof a takeover was indeed intended.

Once Porsche has received the green light from various antitrust authorities, it plans to raise its voting stake in Volkswagen to over 50 percent.