VW’s premium brands could eclipse Ferrari three times over.
The VW Group is one of the largest in the automotive world, with products spanning everything from motorcycles to heavy-duty trucks. With such a diverse portfolio all bundled into one, potential investors are unable to cherry pick their preferred stocks and have to invest in the group as a whole.
Finance Chief Lutz Meschke made a statement at Porsche’s development center this past week where he outlined the benefits of listing VW’s premium brands as a separate entity on the stock exchange. The premium brands he was referring to in his speech included Porsche, Bentley, Bugatti and Lamborghini.
“We would likely be viewed as a luxury goods manufacturer and the multiples are completely different compared with a normal premium brand,” Meschke told reporters. Analyst firm Evercore ISI estimated the VW Groups combined worth to be in the region of $170 billion, twice its current market capitalization, of which Porsche could make up more than half that amount if it were listed.
The Porsche Group was listed on its own before merging with the VW Group in 2009 and Evercore mentioned that, "from a governance, growth and profitability perspective, more autonomy and accountability would make the VW Group a better business. Separately listed legal entities would also provide VW with more flexibility."
Essentially, separating the different brands into more logical segments would be a beneficial move for the whole group. Meschke said that he had addressed the issue of the stock listing with company executives at VW Group headquarters and with the Porsche and Piech families that own a majority of the voting shares in the automaker.
Ferrari went public in 2016 and it had a knock-on effect for the Fiat Chrysler Group too with values of both organizations rising. While nothing concrete has been announced yet, a partial listing of the VW luxury brands may well be in the cards in the near future.