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.

Co-owner is confident that Koenigsegg can rescue Saab

Koenigsegg Automotive believes it can rescue General Motors' loss-making Saab unit, a co-owner of the Swedish luxury sports car maker said.

"We think it is possible (to rescue Saab) and we have several good solutions to bring into Saab," Baard Eker, who holds 49 percent of Koenigsegg, told the Dagbladet newspaper.

General Motors is close to selling Saab to Koenigsegg, a source familiar with the talks told Reuters last week. Saab sought protection from creditors in February and has been granted an extension of its business reorganization until Aug. 20 to line up a new owner and restructure.

"Let me make one thing clear -- we are not buying Saab only to chop it up," Eker said, referring to what he calls "poisonous comments" in Swedish media.

Eker, a Norwegian entrepreneur, said obstacles may still emerge which could potentially stop the sale, but he did not reply negatively when asked about Saab's comments that a deal could be in place next week, according to the paper.

Eker confirmed that several investors are willing to finance the acquisition, but declined to name them or how much money they would contribute.

When asked what was the most important thing that he and Christian von Koenigsegg, the sports car company's founder, could bring in as new owners, Eker said: "Culture and technology. Saab needs to be more innovative."

Eker also said it was not their intention to let "many people go," but declined to be more specific.

Koenigsegg's hand-built super cars are in Forbes magazine's list of the world's 10 most beautiful cars. The company has less than 50 employees and turns out only a handful of $1 million cars a year.

GM, which filed for Chapter 11 protection June 1, put Saab up for sale after deciding to cut its 20-year ties with the brand.

Saab produced nearly 100,000 cars last year, about 1 percent of GM's global output. GM has held talks with a number of potential buyers, including Fiat and Chinese automakers.

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.

Tata may need to invest $1B in Jaguar

 India's Tata group may have to spend at least $1 billion to revive premium brands Jaguar and Land Rover, which were bought by Tata Motors earlier this year, the Economic Timesreported on Tuesday.

Tata Sons, the holding company that holds large stakes in group firms, and unlisted financial services unit Tata Capital are among the options being considered to raise the cash, the newspaper said, quoting unnamed company sources.

"We will do everything in our ability to resource all our operations," the paper quoted a Tata Motors' spokesman as saying. Tata Motors paid $2.3 billion to buy Jaguar and Land Rover from Ford Motor Co. earlier this year, just as global auto sales began collapsing. He declined comment on the size of funds required.

A spokesman for Tata Motors could not be immediately reached by Reuters for comment.

On Monday, UK's Financial Times had reported that Tata Motors had agreed to inject "tens of millions of pounds" into Jaguar and Land Rover to prevent an immediate cash flow crisis.

Tata Motors, which has a market value of about $1.5 billion, has dropped 74 percent so far this year while the main BSE index is down more than half.

VW second quarter profit beats expectations

Second-quarter operating profit at Volkswagen rose 22 percent to 2.12 billion euros ($3.38 billion), the world's fourth-largest car maker said on Wednesday, easily beating market expectations.

A Reuters poll of 20 analysts forecast operating profit to increase 4.4 percent on average to 1.81 billion euros in the quarter from its very strong performance a year ago, putting it on track for an estimated 6.61 billion over the full year.

VW reaffirmed its guidance for an unspecified improvement in results this year.