VW Investors Turn Down Porsche's Low-Ball Offer

VW Investors Turn Down Porsche's Low-Ball Offer

by Anthony Fontanelle

The Volkswagen AG investors refused Porsche AG's 35.9 billion euros takeover offer - the lowest allowable under the German law. The offer is 16 percent lower than the company's 42.7 billion-euro market value on March 23 which is a day prior to Porsche's announcement.

The offer, designed to leave Porsche with a controlling stake rather than full ownership, helps block any rival bids for VW as a European court considers invalidating a German law preventing a takeover. VW Chairman Ferdinand Piech, whose family controls Porsche, has increased his dominance since the sports car manufacturer first bought a stake in 2005.

Shares of VW dipped 1.19 euros, or 1.1 percent, to 109.56 euros. This year, the stock has gained 28 percent - the fifth biggest gainer on Germany's benchmark DAX Index. Porsche, which has called an extraordinary shareholders meeting for June 26 to tackle the VW offer, has obtained a 35 billion-euro line of credit to finance the purchase of VW shares.

Porsche, the Stuttgart, Germany-based maker of the 911 sports car, purchased 188 common shares and 13 preferred shares from VW stakeholders as of the end of last week. The information was divulged by the German automaker in Elektronischer Bundesanzeiger, the government's website for financial filings.

At present, the Wolfsburg, Germany-based automaker, famed for the manufacture of durable auto parts like the VW Beetle tail light cover, is aiming at the right bid. Porsche has bid 100.92 euros an ordinary share and 65.54 euros a preferred share. Bid offers started to pour in on April 30 and are set to end May 29. The sports car manufacturer's stake remained at approximately 30.92 percent of the voting rights as of the end of last week. Porsche also said it is not seeking a majority stake at this time.

A bid now for all of VW will enable the sports car manufacturer to make future stake purchases as it sees fit. Once having made the minimum legal bid to all shareholders, Porsche is no longer mandated by law to present additional purchase offers to all investors.

The sports car manufacturer is anticipating for the EU's possible repeal of a 47-year-old German law preventing a Volkswagen takeover. An advocate general at the EU's highest court Feb. 13 proposed the scrapping of the so-called Volkswagen Law, saying it "restricts the free movement of capital." Porsche, which supports the abolition of the law, has said that it has bought VW shares to protect its interest in the carmaker. VW is Porsche's biggest supplier. The two auto giants have a number of joint projects.

The Volkswagen AG intends to nearly double the number of its Hungarian suppliers after opening a new purchase centre in Budapest, VW and Audi AG Chairman Martin Winterkorn announced. According to a report in local business daily Világgadaság, Winterkorn met Hungarian Prime Minister Ferenc Gyurcsány Friday in Budapest.

Porsche has no intention of acquiring the majority in VW via its compulsory bid, which offers investors just under 101 euros per VW ordinary share, a hefty discount to the current market price of over 110 euros.

VW AG currently has about 60 suppliers in Hungary from which it acquires goods to the value of HUF 200 billion a year and that number is about 1.3 percent of the group's purchasing costs. Winterkorn said tha tthe company's new Eastern European centre could enlarge VW's supplier network in Hungary by a further 40 companies. The group is working on a new compact range for which it will also be seeking suppliers in the region, he added.

"We do not only want to buy here, but also establish a joint manufacturing of parts with our local partners," Winterkorn said, adding they chose Budapest for the location of the centre, as it is not far from the Gyõr and Poznan plants and potential new suppliers in the region.

The VW Group delivered 1.5 million vehicles around the globe in Q1 - an increase of 7.9 percent. Sales revenue increased 5.1 percent to EUR 26.6 billion. "The significant progress we have made in improving our competitiveness is positively reflected in our earnings", Hans Dieter Pötsch, Volkswagen AG's CFO said.

2008 Volkswagen Touareg 2 U.S. Debut in New York

2008 Volkswagen Touareg 2 U.S. Debut in New York

by Benjamin Hudson

The 2008 model year of the Volkswagen Touareg, the first ever sport utility vehicle (SUV) model from the Wolfsburg-based car manufacturer is making its North American debut at the 2007 New York International Auto Show.

Named as the Touareg 2, the vehicle is poised to stir the American car fans at the show with the vehicle's updated exterior styling featuring the company's signature Volkswagen "face" design highlighted by the chrome front grille. Other exclusive features of the 2008 Volkswagen Touareg 2 include redesigned headlamps and darkened taillights, redesigned aerodynamics, sporty rear spoiler with integrated third brake light, optional Bi-Xenon headlights with AFS II that improves night time driving visibility in cornering, and several wheel options for different VW Touareg 2 model trims. For the VR6 FSI, 17-inch alloy wheels are standard while the 19-inch alloy wheels are standard for the V8 FSI and V10 TDI Twin Turbo models. Moreover, the 2008 VW Touareg comes with all-new exterior colors for the customers to choose from. It includes Alaska Gray, Cranberry, Galapagos and White Gold.

Interior highlights of the 2008 Volkswagen Touareg 2 include redesigned luxury seating system featuring standard 12-way power driver's seat, standard Sirius Satellite Radio, park distance control, power lift gate, new instrument cluster with larger display, new silver metallic trim, available ten speaker Dynaudio premium sound system, and optional keyless access with a start/stop button. Bunch of optional packages are also available like the Lux, Lux Plus and Technologie packages.

The VW Touareg 2 also comes with a host of safety features and driver assistance systems to enhance the vehicle's handling. These include new rollover sensor system to detect rollover situation and activate the side and side head curtain airbags, enhanced tire pressure monitoring system (TPS), Electronic Stabilization Program (ESP), hydraulic braking assist, a preventative braking pressure build-up system, and rain brake support. In addition, the Touareg 2 also comes with the world-first "ABSplus" braking system from Volkswagen.

At the heart of the 2008 Volkswagen Touareg 2 comes a three power plant options for the customers to choose from: the powerful 3.6-liter VR6 FSI, the recently upgraded 4.2- liter V8 FSI, and the monstrous 5.0-liter V10 TDI Twin Turbo.

The 3.6-liter VR6 FSI engine replaces the standard 3.2-liter engine of the Volkswagen Touareg. The engine now produces 280 hp, an additional 40 horsepower compared to the previous engine. The 4.2- liter V8 FSI features unleaded fuel direct injection system and pumps out 350 hp and produces 325 lbs. ft amount of peak torque. Lastly, the 5.0-liter V10 TDI Twin Turbo for the 2008 Volkswagen Touareg 2 pumps out 310 hp and produces a stunning 553 lbs. ft. of peak torque output, allowing the Touareg 2 to achieve an impressive towing capability of about 7,716 pounds. All of these engines are equipped with quality VW timing parts like VW timing chain. The Touareg 2's standard gearbox powers the vehicle's permanent 4XMOTION four-wheel drive (4WD) system. Moreover, the 2008 Volkswagen Touareg 2 also features off-road control systems like Hill Roll Back Assist and Hill Descent Assist.

The 2008 Volkswagen Touareg 2 will arrive in Volkswagen dealerships this spring carrying a base manufacturer's suggested retail price (MSRP) of $39,320.

2007 World Green Car Award Finalist: The VW Polo BlueMotion

2007 World Green Car Award Finalist: The VW Polo BlueMotion

by Benjamin Hudson

The Volkswagen Polo BlueMotion sold in the European market was named as one of the finalists for the 2007 World Green Car of the Year. More than 40 automotive journalists from all over the world selected the top three finalists for this year's award. The other two finalists for the 2007 World Green Car of the Year award include the BMW Hydrogen 7 and the Mercedes-Benz E320 BLUETEC.

According to a Volkswagen Group official press release, "The Polo BlueMotion is Europe's most economical five-seat automobile, offering the equivalent of 60 miles per gallon. The key to the Polo BlueMotion's efficiency is the optimization of an already economical package. Incorporation of longer ratio gears in the standard five-speed manual transmission, application-specific light weight alloy wheels, and lower rolling resistance 165/70 R14 tires all contribute to increased fuel economy. The lightweight body structure has enhanced aerodynamics to further improve its efficiency. The Polo BlueMotion doesn't ask its owners to compromise, as its sprightly performance and sporty chassis dynamics provide the "fun to drive" element inherent in Volkswagen's brand DNA."

Introduced at the 2006 Geneva International Auto Show, the Volkswagen Polo BlueMotion hatchback model features a 3-cylinder TDI engine delivering 80 hp (59 kW) at 4,000 rpm and develops a maximum torque output of 144 lb.-ft. (195 Nm) rotating at engine speeds of 2,200 rpm. The engine significantly offers improved fuel efficiency with only 3.9 liters of fuel consumption. In addition, the Volkswagen Polo BlueMotion made it as a finalist in the 2007 World Green Car of the Year award because of the low exhaust (CO2) emissions provided by the 3-cylinder TDI engine. The reduced CO2 emissions was achieved, thanks to the engine's advanced systems including turbo diesel fuel direct injection, optimized exhaust gas recirculation (EGR), improved EGR cooler, and electrically powered EGR valve with VW valve cover and VW valve cover gasket. The engine is connected through a standard 5-speed manual gearbox.

Exterior highlights of the Volkswagen Polo BlueMotion incude side flasher lamps integrated in the outside rearview mirrors, rear spoiler, radiator grille insert, front and rear bumpers in sporty design, side trim strips, sill panel, 14-inch "Jerez" alloy wheels with 165/70 R 14 performance tires, and the "BlueMotion" badge at the rear.

Inside, the Volkswagen Polo BlueMotion comes with four spoke steering wheel, indicator lamps and service interval indicator, seat stripes in "Popcorn" or "Select" pattern, and electric window lifts. In addition, advanced active and passive safety systems are also available as standard equipments including driver and front passenger air bags with front passenger airbag deactivation switch, side air bags for driver and front passenger, height adjustable 3-point automatic front safety belts with belt tensioners, rear head restraints, and antilock braking system (ABS) with convenience braking assist (BA).