Overview of Porsche and Volkswagen’s Relationship

The intricate relationship between Porsche and Volkswagen is far more complex than most people realize. Despite numerous agreements and changes over the years, confusion still reigns. If you've ever wondered who owns whom, read on to unravel the mystery.

Historical Background

Ferdinand Porsche and Volkswagen have a longstanding connection, dating back to their beginnings. Originally, Porsche was not directly owned by Volkswagen AG, similar to SEAT and other subsidiaries. However, in 2009, a significant change occurred. Porsche and Volkswagen agreed to a merger that took effect in 2011.

A Major Shift in 2022

In September 2022, there was a significant shift in the corporate structure. The companies somewhat separated, allowing the public to buy new Porsche stocks under the ticker P911, referencing the famous Porsche 911 model. This move aimed to create a more robust stock market presence and align with public demand. However, the underlying structure remains complex.

The Current Ownership Structure

The actual production of Porsche cars is managed by Dr. Ing. h.c. F. Porsche AG. The distribution of shares among shareholders is as follows:

Volkswagen AG: 75% Porsche SE: 12.5% Qatar Investment Authority: 2.5% Others, including small retail investors into P911: 10%

Volkswagen AG holds a controlling majority, but it doesn't exert full control over everything in Porsche, similar to how it manages SEAT and other subsidiaries. The second largest shareholder is Porsche SE, another company with the Porsche name. However, Porsche SE is only partially responsible for the production of Porsche cars.

The Role of the Porsche-Piech Family

The Porsche-Piech family, the founders' descendants, hold a significant number of voting rights in Porsche SE. They have a total of 100 voting rights but only 50 equity rights. The rest is publicly traded under the ticker POAHY, the Porsche Automobile Holding. This holding company, named Porsche SE, owns 12.5% of Porsche but has 25% of the voting power. It also holds 32% stakes in Volkswagen AG with enhanced 53% voting rights.

Conflicting Ownership and Control

The intricate ownership structure reflects a complex web of shared interests. Porsche, the carmaker, is mostly owned by VW, but it also has partial ownership and control over Porsche SE and other entities. On the other hand, Porsche SE is mostly controlled by VW. Both companies essentially own and control each other, but the Porsche-Piech family retains significant control over both entities.

Implications for Investors

This convoluted ownership arrangement has both advantages and disadvantages. While it may seem confusing, it can also be seen as a strategic move for both companies. The sharing of ownership between the three Porsche-named entities is designed to ensure a steady profit distribution. Small Porsche shareholders receive a share of the profits from Porsche cars, while small VW shareholders benefit from profits from Volkswagen, SEAT, and Porsche cars.

The crux of the relationship is a complex balancing act between corporate strategy, family control, and public interest. It’s a case study in how mergers and corporate structures can become elaborate to suit various stakeholders.

Conclusion

The relationship between Porsche and Volkswagen is a testament to the intricate nature of the automotive industry. Despite numerous changes, the underlying structure remains a puzzle. The Porsche-Piech family’s control is a critical factor in this equation, providing a unique level of influence that extends beyond typical ownership structures.