Fast move

As sports car manufacturer Porsche transforms from an independent company into a brand name produced by the Volkswagen group, eyebrows in Germany have been raised at the increasingly important role the Arab emirate of Qatar, a part owner of VW, will likely play.

Qatar Holding LLC announced last year its intention to acquire some 17 percent of VW's voting shares, and the German newspaper Handelsblatt reported Tuesday the Arabian investors are likely to occupy two of 10 seats on VW's supervisory board. A first Qatar Holding board member, Hussain Ali Al-Abdulla, is expected to be voted in as a VW board member on April 22 to replace German Roland Oetker.

VW is also planning to deepen its research cooperation with Qatar and the German state of Lower Saxony, which owns 20 percent of VW shares, the company announced Monday. Those plans include the expansion of programs at Qatar University in Doha and at the AutoUni institution in Wolfsburg.

Companies linked operationally

A spokesman for Christian Wulff, state premier of Lower Saxony and member of the VW supervisory board, told Deutsche Welle in an e-mail that the focus of the research partnership will be on electronics, materials sciences, and training programs for engineers. But he did not comment on the impact Qatar Holding may have on Volkswagen once it gains voting rights.

Christoph Stuermer, an auto sector analyst at IHS Global Insight, said gauging the role Qatar Holding will play is difficult at the moment because the integration of Porsche into VW is incomplete. While Porsche's car-making unit is clearly a subsidiary of VW on an "operational level" and destined to become a VW brand, Porsche Automobil Holding actually owns 51 percent of VW shares - a slim controlling majority.

"What is still undecided - and what has still not been clarified - is the extent to which Porsche's current shareholders will become shareholders of the ultimate integrated company," Stuermer told Deutsche Welle.

"In terms of the investment strategy of the Arabian side, first of all they are said to be very long-term investors, secondly very patient investors, and thirdly they only invest in the head-company. It was originally Porsche who invited the Qataris to invest."

Porsche Automobil Holding is controlled by the Porsche and Piech families - direct descendants of brand founder Ferdinand Porsche. However, the company incurred a 10 billion euro debt ($13.7 billion) in 2009 in a failed attempt to take over VW. Instead, VW took over Porsche's car making operations, and Qatar Holding bought into Porsche Automobile Holding and VW.

A spokesman for Porsche Automobil Holding said the families did not want him to comment on the Handelsblatt article, which claims Qatar Holding was promised two supervisory board seats in a moment of financial desperation.

Porsche returning to profits

Porsche Automobil Holding was 11 billion euros ($15 billion) in debt at the end of its 2008/09 fiscal year, but reduced that number to 6.1 billion euros ($8.4 billion) by the end of January. Its 2009/10 fiscal year began July 1, and the company announced Wednesday a first-half operating profit of 329 million euros ($450 million). Its sales grew by 3.7 percent to 3.16 billion euros ($4.35 billion) during that time.

Author: Gerhard Schneibel
Editor: Sam Edmonds