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VW Mulling Lamborghini Restructuring – A Sale Or IPO: Reports

VW Mulling Lamborghini Restructuring – A Sale Or IPO: Reports
The strategy of the German car maker Volkswagen to more than double its market value and transform the largest auto company is reflected in the plans of the company to review options for its Lamborghini supercar division.
According to reports, the company is mulling to either publicly list the Italian brand or to sell it according to the plans of the company’s Chief Executive Officer Herbert Diess to generate more resources to invest in the main VW, Porsche and Audi brands. The reports quoting sources with knowledge of the matter however also said no decision has yet been made and the option of putting Lamborghini from under the Audi umbrella to Porsche, which had been planned earlier, is still under consideration.
The presence of multiple power bases that play a role in major decisions taken at Volkswagen makes structural change a very large challenge at the company. Ahead of an expected industry shakeout, the top brass of the company has been rooting for ideas to structurally change the company as a part of a broad strategy review of the company affairs. Sources said that the aim of Diess is to increase the market value of Volkswagen to 200 billion euros or S$301 billion.
Some reports have strongly indicated that Volkswagen has already initiated measures to crave a separate entity out of Lamborghini and that the efforts of doing so can be achieved by the company by the end of next year.
The goals of channeling resources more efficiently and avoiding duplicated efforts as stated by Diess would be adequately reflected by the restructuring of the super-luxury brand. However the company told the media on Sunday that any decision for the brand is far off and there are no plans for a sale or IPO launch of Lamborghini.
Since he became CEO 18 months ago, Diess, 60, has been pushing an overhaul of Volkswagen and the company ahs, as a consequence, invested billions in electrification of vehicles. Additionally, Diess has also sold a stake in truckmaker Traton SE and is seeking bidders for the company’s industrial-transmission and diesel-engine units. The company has also forged a partnership with Ford Motor Co. for aimed as sharing the financial burden for development of vans, and technology development for e-cars and autonomous driving.
"We shouldn't spread ourselves too thin," Diess said in an interview published over the weekend in Germany's Sueddeutsche Zeitung newspaper. "That might be hard in some cases, but it's the only viable way."
Without mentioning the source of the information, the Sueddeutsche Zeitung newspaper also suggested a possible sale or IPO launch for Lamborghini. There are 12 global brands of Volkswagen.
Analysts have been pushing for Volkswagen to implement deep structural changes – for example, the public listing of Porsche, to increase company valuation. This sports-car unit of the company is the most profitable brand for the group while the biggest share of earnings is delivered by its Audi brand.

Christopher J. Mitchell

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