06 July 2010

Porsche Names new CEO; Macht to run VW Production

Bloomberg Business Week

Volkswagen AG appointed Matthias Mueller, its top car-model strategist, as chief executive officer of Porsche AG to revive the division’s lineup of luxury vehicles in an integration with Europe’s largest automaker.

Mueller, 57, will replace Porsche CEO Michael Macht, who will succeed Jochem Heizmann as Volkswagen’s production chief, Volkswagen and Porsche said today in separate statements. Heizmann will run a new unit overseeing VW’s truck holdings. The changes take effect on Oct. 1.

Volkswagen, which aims to surpass Toyota Motor Corp. in deliveries and profitability by 2018, is taking over Stuttgart, Germany-based Porsche SE’s carmaking operations as the companies build on a partnership that includes sharing vehicle platforms. Porsche wants to expand its four-model lineup to double sales in the medium term to 150,000 cars and sport-utility vehicles.

“Porsche is getting access to VW technology and will be run as part of an efficient multibrand group,” Arndt Ellinghorst, a London-based analyst with Credit Suisse Group AG, said. “For Porsche, that’s opening up huge business prospects.” Ellinghorst has “outperform” recommendations on both Porsche and VW preferred shares.

Volkswagen preferred shares rose as much as 1.97 euros, or 2.8 percent, to 71.97 euros, the biggest intraday jump since June 21, and were up 2.2 percent as of 2:48 p.m. in Frankfurt trading. Porsche increased as much as 6.1 percent to 35.80 euros, the biggest gain since May 27, and was up 5.3 percent.

Sales Target

Porsche’s deliveries in the nine months through April declined 0.1 percent to 53,605 vehicles. Full-year sales may still exceed the 75,238 deliveries of fiscal 2009 as a new version of the Cayenne SUV, its best-selling model, and a six- cylinder Panamera car reach showrooms, the company said June 18.

The Cayenne shares its chassis and major parts with Volkswagen’s Touareg and the Q7 SUV made by VW’s Audi luxury brand. Volkswagen also makes the Panamera’s body.

VW made the announcement in advance of a press event in southern Germany to show a new version of the Sharan family van. The model, the Sharan’s first revamp since its introduction in 1995, will be longer and have a wider wheelbase than the current van. The vehicle, priced starting at 28,875 euros ($36,300), will reach showrooms on Sept. 3.

Mueller led product management at Audi for four years through 2007 before he joined Volkswagen. His experience “will help guarantee that Porsche can build upon its leading position as a global brand,” the sports-car manufacturer said.

VW Role

Macht, 49, spent a decade running Porsche’s production before he was promoted to oversee the carmaking division when CEO Wendelin Wiedeking quit following the collapse of plans to take over VW. Volkswagen CEO Martin Winterkorn is now also chief executive officer of Porsche SE, the sports-car maker’s holding company. VW owns 49.9 percent of the Porsche AG auto- manufacturing unit in a first step toward the companies’ merger.

Macht will join Volkswagen’s management board and will “vigorously pursue the productivity targets” the company has set in its expansion drive, VW said.

“Mueller is extremely well connected within the VW group” in contrast to Macht’s ties to Porsche under Wiedeking, Ellinghorst said. “He seems perfectly placed to help integrate Porsche into a 10-brand structure in the best possible way.”

Heizmann, 58, has been a member of Volkswagen’s executive board since February 2007. His new role will be to tighten cooperation between truckmakers Scania AB and MAN SE, people familiar with the matter said in April. Volkswagen holds 71 percent of the voting rights in Soedertaelje, Sweden-based Scania and is the biggest shareholder in Munich-based MAN with a 29.9 percent stake.

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