Tuesday, 14 December 2010

Premium Brands

Volkswagen Group sells more cars than Ford in Britain. That’s not just Volkswagens of course. It is also Seats, Skodas and Audis. You could include other VW-related nameplates, Bentley maybe, Porsche and Lamborghini although the numbers would not add up to much. It was a bit different in 1991 when everybody was into acquiring a premium brand as a means of improving profit-per-car. Ford sought Jaguar and Volvo, General Motors Saab, while Toyota created Lexus and Nissan Infiniti.
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Ford is now back to just Ford. If it still owned Jaguar-Land Rover and Volvo, or wasn’t busy relinquishing its stake in Mazda, VW might not have taken the lead. Ford claims it is less concerned about market share than about profit. Well, it would say that, wouldn’t it, yet it is probably true. The engines and components it still makes for Jaguar and Volvo, a relic of its ownership years, must make a useful contribution to its balance sheet. An Aston Martin V12 started life as a doubled-up Mondeo V6 after all, and Ford-made bits will go into Indian-owned Jaguar and China-owned Volvo for a long time to come.

VW has been good at absorbing other makes and keeping them all on board. It is rationalising its engineering, concentrating development of sports and luxury cars at Porsche against opposition from Audi, which keeps the 2007 modular longitudinal matrix for the Audi A4, A5 and Q5. With the dust is settling on who owns what at Porsche and VW, Martin Winterkorn told Audi executives just before the Porsche AGM at the end of November that it will keep the lead in developing large luxury cars. Winterkorn reassured Porsche that it won’t be merely a tenth VW brand and will develop the Panamera and future Bentleys, as well as a sports car platform for Porsche, Audi and Lamborghini. It will have a new wind tunnel, a design centre with a hundred new engineers and integrate electronics at Weissach.

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