Volkswagen mulls options for Lamborghini brand in overhaul

Bloomberg

Volkswagen AG is weighing options for its Lamborghini supercar brand, as the German manufacturer moves ahead with an overhaul aimed at more than doubling its market value and getting ahead of an expected industry shakeout, according to people familiar with the matter.
The options VW is mulling include a sale or stock listing, said the people, who asked not to be named because the deliberations are confidential and no decisions have been made. Chief Executive Officer Herbert Diess plans to focus future expansion on the group’s main global brands — VW, Porsche and Audi — in a push to channel resources more efficiently and avoid duplicated efforts.
A Volkswagen representative declined to comment. The German automaker’s American depositary receipts climbed as much as 5.7% to $17.84 in New York trading.
Lamborghini’s stretch from supercars to roomier sport utility vehicles probably has helped boost its valuation to about $11 billion, making it a viable candidate for an initial public offering, analysts at Bloomberg Intelligence estimated in August. Sales of the Urus SUV have soared since its introduction in mid-2018. A redesigned Aventador and new hybrid supercar slated to hit the market next year may help boost margins beyond 30%, BI’s Michael Dean and Gillian Davis wrote in a report.
Diess’s Target Investors have long urged Volkswagen, the world’s biggest automaker, to free up assets whose value is subsumed within a cumbersome structure that includes everything from Italian supercars to motorcycles and heavy trucks.
While Ferrari, once part of Fiat Chrysler, is now worth $30 billion, VW’s powerful labour unions have stood in the way of similar moves in Germany.
Diess, who took the helm in April 2018, has shown some success, completing an IPO of the Traton truck unit earlier this year, and has gained backing for the planned sales of units that make large diesel engines and transmissions. He’s also forged a broad alliance with Ford Motor Co on commercial vehicles and electric-car and self-driving technology.
The CEO often emphasizes the urgency of maximising VW’s value as it contends with a costly technology transition, and recently key members of VW’s founding Porsche-Piech clan have voiced support. He’s targeting a market value for Volkswagen of $220 billion, the people said, from about 81 billion euros now. His efforts are aimed at helping VW defy the auto industry’s current gloom and keep both existing peers and new rivals from the technology industry at bay.
VW has started preparations to fold Lamborghini into a separate legal entity and the process might conclude towards the end of next year.