Porsche's Biggest Decision In Decades Coming Soon

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Volkswagen Group management will make the final call.

Porsche plays a vital role within the Volkswagen Group. The sports car and luxury brand brings in billions every year, profit its parent company seeks to re-invest in its electric mobility strategy against Tesla, General Motors, and other rivals. But there's another way Porsche could potentially become even more valuable: an initial public offering. A possible Porsche IPO first came to light last month and Reuters reports a final decision is expected soon.

Porsche CFO Lutz Meschke made clear "the decision has to be made by the Volkswagen management and supervisory board. We have largely discussed the advantages of such an initial public offering or listing already." Meschke has been in favor of listing Porsche since 2018 after closely following the success story of Fiat Chrysler's listing of Ferrari a few years prior.

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rear Side Angle Driving Porsche

Some estimates have pegged Porsche's value anywhere from $83 billion to $109 billion. The entire VW Group is currently worth around 220 billion euros. Meschke added any Porsche listing would include a dividend, meaning Volkswagen would still be able to benefit from the brand's expected fortunes.

Group CEO Herbert Diess, however, is supposedly not entirely on board with the idea for a very good reason. Porsche contributed 42 percent to VW Group's operating profit last year. It's a vital brand, especially with newcomers like the Porsche Taycan, the brand's first-ever electric vehicle. It quickly proved to be immensely popular in its first model year. An all-electric Macan SUV is due next year.

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Front Angle View Porsche

Whether Diess and the rest of senior management decide to list Porsche or not, its position within the automaker continues to strengthen. For example, earlier this month it was announced Porsche increased its stake 24 percent in Rimac, the Croatian electric hypercar company and technology R&D powerhouse. It's quite possible, Meschke admitted, Rimac and Bugatti, the Group's ultra-luxury hypercar brand, "will come together" in some sort of joint partnership, possibly under Porsche's direct control.

There's no question VW has a big decision to make regarding's Porsche's future. No matter which direction is ultimately chosen, VW wants to ensure it'll continue to financially benefit from Porsche for decades to come.

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2020-2021 Porsche Taycan Charge Port Porsche
Source Credits: Reuters

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