Filed under: Porsche, Toyota, Volkswagen, Earnings/Financials
The most valuable carmaker in the world is... ta-da, Volkswagen
As with this year's American football season, weekly surprises in the car industry are now standard fare. VW recently overtook Ford for the number three spot in global sales, and now the home of the Beetle and the Veyron has overtaken Toyota as the industry's most valuable company based on dollar-converted market capitalization. Just as eyebrow raising is the reason for it: Toyota's stock has dropped 5% to its lowest point in four years due to the usual suspects, while VW's stock has climbed a stratospheric 87% due to the fact that Porsche is busy gobbling up the company. As far as we're concerned, that makes Porsche the real story: one of the industry's smallest players – it sold less than 100,000 cars around the world last year and still set a personal best – is about to be the world's third largest car maker and, for a while at least, its most valuable. What a difference [Source: Bloomberg]
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Reader Comments (Page 1 of 2)
Dondonel 4:10PM (10/07/2008)
I might be wrong on this, but to my knowledge Porsche is the largest VAG dealer in Europe. This is where their money come from, not from 911 or Cayennes.
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zamafir 4:43PM (10/07/2008)
Yup, you're wrong, it comes from cayannes specifically, it's been documented by every car magazine since the suv's introduction and success. Also you may want to read some of those magazines or motorauthority, go glean some insight into the struggle between Porsche and vw to learn just how far from the truth your comment is. Not only are they not dealers of VAG in Europe, or anywhere, they're also butting heads with vw to the point that vw is doing everything they can legally to prevent the porche buy out from being anything put purely monetary investment.
I'm sure vw won't succeed. But you couldn't be more wrong from either perspective.
Yago Bal 4:16PM (10/07/2008)
Some Porsche dealers sell Audi's too, but these dealers are not owned by Porsche...
The financial upturn of Porsche actually started with the Boxster/996 pair, after Toyota helped them with their manufacturing practices. So, quite before the Cayenne.
Einwiwi 5:08PM (10/07/2008)
Yeah, for sure. Toyota helped Porsche. Never heard such a crap before.
Toyota did not help any other car manufacturer. But different manufacturers started to use lean production methods.
Dondonel 5:06PM (10/07/2008)
@Yago Bal
Forget about what is happening in US. Porsche sells VWs mostly in Eastern Europe. Now they sell about 500,000 cars a year but the number is increasing rapidly.
See here the statistics for Porsche Holding:
http://www.porsche-holding.com/en/company/facts_figures/new_car_sales/1999_00_2007_08/
Dondonel 5:17PM (10/07/2008)
@zamafir
Porsche sold worldwide about 30,000-40,000 Cayennes per year and the numbers are decreasing. Porsche Holding on the other hand sells about 500,000 vehicles per year. Porsche Holding GmbH might operate at lower margins than Porsche AG, but still gets higher profits.
Dondonel 5:27PM (10/07/2008)
@zamafir
Here is another link, with the top 10 European car dealers by revenue, Porsche Holding is the largest:
http://www.talkingmotors.com/index.php?option=com_content&view=article&id=27375:inchcape-outperforming-pendragon-in-europe&catid=9:car-dealer-news&Itemid=16
Mobius_1 7:02PM (10/07/2008)
Apparently Porsche did officially consult Toyota, and that really helped with cutting costs, and that Cayenne is no doubt a real business success story, despite somewhat revolting looks. However, 911s now makes up (I think) the majority of NA sales, and lots of sales elsewhere as well.
tekd 10:06PM (10/07/2008)
So...if Toyota helped Porsche and then Porsche goes and buys VW and applies whatever they learned...
Then...Toyota's moving VW forward? That's rather unfortunate when you make your own competitors better.
I can only presume that Toyota didn't think Porsche would ever really compete in the same segments as them, since helping VW would seem rather counterproductive.
Retroqqq 4:12PM (10/07/2008)
SKODA
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Robert 4:14PM (10/07/2008)
July 1993, the first Road & Track I every bought, featured Porsche and it's uncertain future. They were operating at a loss, their factories were underutilized, and their canceled four-door model made them look inept. If only our economy improves as well as Porsche did.
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Mobius_1 7:05PM (10/07/2008)
Porsche had a very good CEO to guide them. As for the USA... Let's hope whoever triumphs will be as good as that CEO
OOMPH! 4:25PM (10/07/2008)
..ofcourse Volkswagen AG is the most valuble,,this ofcourse should be of no surprise.
Das Auto
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Stumpy 4:33PM (10/07/2008)
Quality Cars, all around.
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Chuck 4:37PM (10/07/2008)
Volkswagen today roughly has the combined market cap of Nissan, Renault, Honda, GM, Ford, Fiat and BMW combined.
Audi just reported the most successful september of all times, Volkswagen recently introduced the new Gold 6 just for one single reason (because technically it's just a facelifted Golf V) - the higher profit margin. Generally the VW numbers currently are very good.
I'd say they're doing pretty well with their plan for world domination in 2015, see: http://www.autoblog.com/2007/09/24/toyota-to-be-overtaken-in-2015-by-the-germans/
Roughly a year ago everyone here was joking about that statement, but the world changed pretty fast, eh?
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Bill Montgomery 5:17PM (10/07/2008)
Indeed! Thanks for posting that. Obviously VW is doing something right around the world. When we think of just how many companies the group constists of, it is pretty impressive: (VW - Skoda - SEAT - Bentley - Bugatti) and (Audi - Lamborghini ) = all on their way to be owned by Porsche...
IMO it's the best group of cars in the world consisting of everything from economy cars, sportscars, luxury cars, and ultra sports and luxury cars...
tekd 10:12PM (10/07/2008)
Market cap doesn't actually mean very much right now since most auto company stocks are beaten down beyond belief due to the current economy and horrible sales. VW's market cap is only humongous because Porsche is buying shares of the company to build up past 50%, and when you have someone trying to buy up all the shares they can the price is going to skyrocket.
But I will say that VW is doing a lot better than most people thought it would (including me). I'm rather surprised that they've managed to get their costs down to where pricing is actually competitive (like the new Rabbit) which is certainly helping them actually sell cars.
Still, being able to sell cars in volume and being #1 is a big difference.
david 4:53PM (10/07/2008)
Das ist good!
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Frank 6:11PM (10/07/2008)
+1 ... u were looking for the word gut, i believe.
Cardude 9:15PM (10/07/2008)
All thanks to the Beetle!
It's fitting. Porsche started building rebodied souped up VWs, and now Porsche is getting ready to buy the company that spawned them. Full circle.
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