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.

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.

Bugatti unleashes four-door Veyron

Royale shares coupé’s vast W16 engine, whilst mixing huge pace with more space and luxury

It's the Veyron for all the family! This is our best look yet at the stunning Bugatti Royale – a four-door four-seater that’s set to take the famous firm into a new market.

With the £900,000, 253mph Veyron 16.4 already crowned the world’s most expensive and fastest supercar, Bugatti is seeking to go a step further: it will celebrate its 100th anniversary by unveiling this hyper-saloon at the Frankfurt Motor Show in September.

Inspired by the legendary 1927 Type 41 Royale, the new model would be as expensive as its brother and be available in a very limited production run for the company’s most loyal customers. As you can see, the exterior echoes the Veyron’s, while inside the cabin will offer unparalleled luxury, with the finest leather, suede and metal trim in addition to seating for four people and a luggage compartment at the rear.

Bugatti won’t be embarking on the project alone, though. It’s rumoured that the firm will team up with fellow VW Group luxury manufacturer Bentley in developing a new front-engined limousine platform. As well as underpinning the Royale, the chassis would be used on the next Arnage. However, the new Bugatti will keep much of the technology seen on the Veyron, such as its four-wheel-drive set-up and 8.0-litre quad-turbo W16 engine, although this will be mounted at the front.

With the same 987bhp and 1,250Nm of torque, the Royale should cover 0-60mph in three seconds and hit a 250mph top speed, making it the fastest four-seater in the world. It will also feature the same seven-speed twin-clutch transmission – developed by UK firm Ricardo – along with that Haldex clutch-equipped all-wheel drive. There will be active aerodynamics, a Veyron-style hydraulic rear wing that rises at speed, huge carbon composite brake discs and adaptive dampers, too.

The current economic downturn means the Royale is still some way off. But with McLaren Automotive boss Ron Dennis predicting a return to growth in 2011, just in time for the launch of his company’s P11 supercar (see Issue 1,060), expect the four-door to go on sale in three years’ time.

In further celebration of its 100th birthday, Bugattiis also planning to launch a 1,350bhp ‘super’ Veyron later this year, along with additional special editions.

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.

VW gives the Golf fresh look, competitive price

Volkswagen has given its next Golf a fresh design, new technology and a competitive price in a bid to maintain the car's position as Europe's top-selling lower-medium model.

The sixth-generation Golf will be unveiled at the Paris auto show in October and will go on sale in Europe shortly after.

The new entry-level Golf will cost 16,500 euros in Germany, about 200 euros more than the current car.

ENLARGE

Redesigned key elements

VW has redesigned key elements of the current Golf to give the new model a sportier and more distinctive appearance than previous generations of the car. The wide grille is similar to that of the new Scirocco coupe.

The new Golf will have diesel engines equipped with common-rail injection technology, which is quieter than the current pump-injection diesel technology.

The new Golf's Euro 5-standard gasoline and diesel engines are up to 28 percent more fuel efficient than engines in the current car.

The most fuel-efficient engine, a 110hp, 2.0-liter diesel, uses 4.5 liters of fuel per 100 kilometers, a 0.6 liter reduction compared with the current engine. It emits 119g/km of CO2.

For the first time, the Golf will be offered with adaptive chassis and automatic distance control, and parking assistance.

VW has sold 26 million Golfs since the car was launched in 2003. Last year, VW sold 548,942 Golfs in Europe, according to JATO Dynamics.

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.

Volkswagen Polo

VW supermini set to get a lot more stylish thanks to Scirocco inspired design.

The Polo is getting a ‘fresher’ flavour! VW’s fifth-generation supermini will go on sale next year with a more upmarket look – and a front end which has been given ‘the Scirocco treatment’.

The car’s nose reflects the styling of VW’s sleek coupé – and inside, there is a classier cabin. A range of new engines includes hi-tech, low-emission diesels and super-turbo petrol powerplants.

As you can see from our pictures, produced using insider information, the Polo draws on the next Golf and Scirocco, dropping the large chrome grille seen on recent VWs for a simpler design with twin horizontal air intakes and angled headlights. It’s a cleaner look all-round, with uncluttered flanks, neat tail-lamps and a purposeful stance.

Under the skin, the Polo gets the new PQ25 small car platform – first used by the latest SEAT Ibiza. This means a bigger cabin, even though the dimensions are similar to the current model’s.

Quality will improve, as VW bids to address criticism over falling standards. It promises the Polo will be the best-built car in its class, with a Scirocco-style dash and soft-touch materials.

The generous kit tally will include an MP3 player input and Bluetooth connectivity on most models. Plus, the Polo could get the same sat-nav docking port as the Ibiza – this allows portable, hand-held units to be plugged into the dash.

While the car is unlikely to match the likes of Ford’s next Fiesta for driver fun, the steering will be improved and the ride made more compliant. Engine highlights will include 1.4 and 1.6-litre FSI direct-injection petrol units, plus new TDI turbodiesels.

The Polo will also make use of VW’s 1.4-litre supercharged and turbocharged TSI motor, available in a 138bhp ‘warm hatch’ and a 168bhp GTI variant. There will be a new Bluemotion model, too – this promises to emit less than 100g/km of CO2 and return 75mpg economy.

The firm’s seven-speed DSG twin-clutch box should appear as an option throughout the range. As well as three and five-doors, there will be a coupé-cabrio, inspired by the Karmann-built drop-top seen at 2007’s Frankfurt Motor Show.

In addition, buyers get the option of a four-wheel-drive SUV variant to replace the Dune – as we revealed in Issue 1,018 – and a compact MPV. These models won’t appear until at least 2010, while the hatch arrives next year, starting from around £9,000.

In a related story, VW has revealed more about its future by unveiling its first-ever plug-in hybrid. The Golf-based Twin Drive can run for up to 30 miles solely on battery power thanks to an 82bhp electric motor. When it runs out of energy, a 122bhp 2.0-litre turbodiesel takes over.

It gets stop-start technology, regenerative braking and hits a top speed of about 75mph. Energy comes from lithium-ion batteries that can be plugged into a household socket.

While there are currently no plans to put the Twin Drive into production, some of its features are set to debut on VW models within the next two years.

Automotive shares down as raw-material prices surge

Shares were lower in mid-afternoon trade as surging raw materials prices put pressure on automotive and other transport-related stocks.

Automotive stocks were particularly hit by news that oil prices reached a record high last Friday and a prerelease of auto motor und sport magazine which quoted ArcelorMittal's vice president for Automotives Jean-Luc Maurange as saying the company plans to charge higher prices to carmakers due to surging raw materials costs.

Daimler was off 0.99, or 2.48 percent, at 38.89 while BMW was down 0.15, or 0.50 percent, at 30.04.

Another factor contributing to weaker car stocks was Lehman Brothers' removal of Peugeot and Daimler from its Recommended Portfolio List, according to traders.

The only car stock on positive terrain so far was Volkswagen, up 0.86, or 0.48 percent, at 179.92. VW's management board is set to decide July 8 on the site of its new 500 million euro production site in the United States, auto motor und sport reported, citing management sources.

VW feels pinch from raw materials

Volkswagen is stepping up efforts to cut costs in the face of rising raw materials prices but still expects to feel the pinch, Europe's biggest carmaker said today.

"From today's perspective the impact resulting from (cost-cutting) will not compensate for current market prices," a spokesman said.

VW's comments came amid a sell-off in European car sector stocks given renewed concerns over raw material prices, ongoing worries over the outlook for the U.S. economy, and the euro's strength against the dollar.

Volkswagen and other carmakers typically lock in steel prices via long-term contracts but face price increases as these contracts have to be renewed.

BMW, the world's biggest premium carmaker, reiterated that it expected the burden from higher materials costs to rise 12 percent this year versus 288 million euros ($448 million) in 2007 and 178 million the year before.

Shares in Daimler retreated on market talk -- which the company denied -- that it was lowering its 2008 guidance for higher operating profit from ongoing operations.

Daimler stock was down 4.9 percent at 12:47 CET, while Volkswagen shed 2.1 percent and BMW fell 3.7 percent.