| Bloomberg reports Porsche AG's 911, a $72,400 | | | | Management in Frankfurt, including Volkswagen |
| sports car, spurred the carmaker's being the | | | | and Porsche shares, commented that the |
| world's most profitable last year. CEO | | | | alliance between Porsche and VW is extremely |
| Wendelin Wiedeking says earnings will grow | | | | important to Porsche. |
| even more because of Volkswagen AG's Golf, a | | | | |
| $15,000 hatchback. | | | | As regards lagging profitability, the report |
| | | | says that such concern on Volkswagen would |
| The report said Wiedeking may extend the | | | | crimp Porsche's growth sent the luxury |
| luxury car company's share-price gains by | | | | carmaker's shares plunging 10 percent on |
| increasing the stake and using Porsche's | | | | Sept. 26, 2005, a day after Porsche said that |
| influence to convert Europe's biggest | | | | it would acquire a stake in the larger |
| carmaker. Analysts and investors say | | | | automaker. |
| Porsche's experience in "thin" production | | | | |
| will enhance Volkswagen's profitability, | | | | In 2005, Wolfsburg, Germany-based |
| while the companies will save by sharing | | | | Volkswagen's operating margin was 3 percent |
| development costs. | | | | as compared with 19 percent at Porsche in the |
| | | | 12 months ended July that year. |
| Sales and profit at Volkswagen, now 31 | | | | |
| percent owned by Porsche, have already | | | | Volkswagen's margin widened to 4.3 percent in |
| increased since the initial tie-up, spurring | | | | 2006, as new models such as the Eos and the |
| Porsche's shares more than double. | | | | Audi Q7 helped lift sales 10 percent to 5.72 |
| | | | million vehicles. Net income increased more |
| Peter Braendle, who helps manage almost 63 | | | | than doubled. |
| billion Swiss francs ($52 billion) in assets | | | | |
| at Swisscanto Asset Management in Zurich, | | | | Cost cutting already began at Volkswagen. As |
| plus shares in both car companies, said | | | | a matter of fact, former Chief Executive |
| Porsche knows how to manage itself and stands | | | | Bernd Pischetsrieder has thrown off 20,000 |
| to significantly earn from its ownership in | | | | jobs. |
| Volkswagen. | | | | |
| | | | Andreas Dittmer, who helps manage nearly 3.5 |
| Adam Jonas, an analyst at Morgan Stanley in | | | | billion euros in assets at Apo Asset |
| London, forecasts that Porsche's profit may | | | | Management in Cologne, Germany, which |
| grow to more than 3 billion euros, which is | | | | includes Volkswagen shares, commented that |
| tantamount to $4.1 billion, in five years | | | | "Volkswagen has become leaner''. |
| from 1.39 billion euros in the 12 months | | | | |
| ended July 2006. He expects that the | | | | Porsche is entitled to almost one third of |
| company's shares will reach 1,650 euros | | | | Volkswagen's dividend, which was 497 million |
| within a year, as compared with Thursday's | | | | euros in 2006. Wiedeking said on June 26 that |
| closing price of 1,330 euros. | | | | Porsche's profit will really rise |
| | | | significantly this year. And thanks to |
| Juergen Meyer, who helps manage almost 1.3 | | | | Volkswagen. |
| billion euros of assets at SEB Asset | | | | |