When 60 percent of your company’s sales come several niche groups, it might be in your best interest to bundle those niche groups together.
Bently, Bugatti, Porsche, and Lamborghini. On their own, this group of premium car makers makes up 60 percent of VW’s group’s profits. That’s why Volkswagen, as per Auto News Europe on their report on this possible merger from earlier this weekend (Sept. 8, 2018) is considering bundling these four brands together under one umbrella brand that would then possibly go public. With this move, Lamborghini would shift away from Audi and would partner with Porsche instead, which, by the way, sounds like a recipe for some potent feature models.
Despite Dieselgate, Volkswagen is still top dog in the entire world when it comes to sheer numbers of cars sold and revenue.
Earlier this month I wrote about, despite not being a sales unit leader, the Tesla Model 3 manages to be the best-selling vehicle in the United States when it comes to bringing home the bacon AKA revenue. Driven by performance and technology options tacked onto the base-price of the vehicle, these once seemingly affordable cars suddenly become quite profitable.
The same kind of reasoning you can apply to cars like the Lamborghini Aventador. With a base price of $400,000, to the average well to do person, it’s hard to believe, but this car is well within their reach. But what’s $400,00 when you can add-on a full carbon fiber interior for another $12,000 or a fire extinguisher that’s $800. These cars are great sources of revenue and ultimately, profit.
Under a new “premium” umbrella group, this VW super group can further streamline their operations when it comes to management, marketing, sharing technologies (collaborating on new projects), and more importantly, expensive research and development.
It’s no mystery that powertrain preferences and consumer tastes change with the season. It would behoove VW’s most popular brands to pool their resources coming up with solutions for hybridization and electrification in this new group.
But, as Car Scoops points out, this type of merger has failed in the past before mentioning Ford’s Premier Automotive Group that included Aston Martin, Jaguar, Land Rover, Volvo, and Lincoln-Mercury.
I hate to say it but these are the Germans we’re talking about here. They’re very efficient and crafty. Heck, they almost fooled the entire world into thinking their diesels were really something special.
I wonder what they’ll call their Super-premium umbrella group. Whatever it’ll be, investors will want to know asap.
