VW Might Create Super-Premium Group For Its More Exclusive Brands

The VW Group is undergoing structural changes, one of which could see a new “super-premium” brand group take shape that will include Bentley, Bugatti, Porsche and Lamborghini, the latter possibly being transferred from Audi’s custody to Porsche.

While the move has yet to take place, VW Group CEO Herbert Diess says that he has already taken steps that could pave the way for the formation of this new luxury division. A move that, according to Bloomberg analyst Michael Dean, could be worth more than 120 billion euros ($139 billion), reports Automotive News Europe.

Meanwhile, when the group’s Chief Financial Officer, Frank Witter, was asked whether VW would be open to selling shares in its luxury car unit (including Porsche and Lamborghini), he did not shut the idea down.

“It is a legitimate question, without a doubt,” stated Witter. While the focus is to prepare VW’s heavy-trucks division for a potential IPO, being more efficient and boosting profit margins, the exec added that “every other consideration might be down the road, but it’s currently not a priority the management is working on.”

Moving all of its luxury brands to a so-called “super-premium” group could help with the efficiency part of the plan, especially with the entire group’s stock value being down 19% this year and its market value stagnating at 67 billion euros ($78 billion). Taking steps towards a structural change for its luxury brands should help change that, as they generate around 60% of the group’s profits.

On the down side, we’ve already seen one major manufacturer create an umbrella for its more prestigious brands – and it went down in flames worse than the Hindenburg. The year was 1999, the automaker was Ford, and the brands that were singled out for the Premier Automotive Group (PAG) were Aston Martin, Jaguar, Land Rover, Volvo, Lincoln and Mercury. The experiment was a failure, Ford sold off all its European brands, killed off Mercury and kept Lincoln.

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