VW/Bugatti/Porsche: a family affair | Financial Times

Alas, Jeremy Clarkson. Traditional journalistic hyperbole about the “full-throated roar” of combustion engines is on the way out. “Polite buzz” better describes the noise of an electric vehicle — and chatter concerning partial spin-offs of Bugatti and Porsche.

Bugatti is owned by the Volkswagen group alongside Italian supercar and motorcycle brands Lamborghini and Ducati. These marques, dismissed by critics as “hobby brands” of erstwhile chairman Ferdinand Piëch, look out of place as the German carmaker reshapes itself for the electric age.

At the weekend, Oliver Blume, chief executive of VW affiliate Porsche, said Bugatti would be a good technological fit with Croatian electric sports car maker Rimac. His comments fuelled speculation that a sale could be announced as early as the first half of this year.

A disposal would excite motoring journalists more than investment writers. The marque is favoured by Jay Z, Tom Cruise and Ralph Lauren. Fewer than 100 were sold in 2019. VW holds a 15 per cent stake in Rimac via Porsche and a deal could be for more shares.

VW’s bigger bet on electric sports cars is via Porsche. The German car group is reportedly considering listing its nippier affiliate as a riposte to the success of Tesla.

Porsche’s electric Taycan sports car sold 20,000 units last year, a tally that should increase by half again this year. The company is developing a platform (a chassis with trimmings) for premium electric cars with stablemate Audi. This should underpin the electrification of more than 80 per cent of Porsche sales by 2030. 

A listing would be a big deal, valuing Porsche at some €100bn if a Ferrari-style earnings multiple applied. If VW sold a Porsche stake rather than handed it out to VW shareholders, the proceeds could support electrification. But there may be little appetite for a listing within the Porsche-Piëch family, which controls 52 per cent of VW voting rights. 

Handing Bugatti’s car keys to Rimac would be the easy bit. VW is constrained from selling Lamborghini and Ducati by pledges to trade unions. Setting Porsche up as a direct competitor to Tesla would be hardest of all.

The Lex team is interested in hearing more from readers. Please tell us whether you think VW should rejig brand ownership to adapt to the transition to EVs.