VW talks Porsche IPO numbers, which could happen in the fourth quarter

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Picture: Porsche

Porsche’s potential IPO is taking shape, sanctions against Russia are already hitting automakers producing there, and this year’s 24 Hours of Le Mans has become much less interesting. All that and more in this Friday edition of The morning shift for February 25, 2022.

1st Gear: VW could float more than $10 billion from Porsche as early as Q4

Earlier this week The news broke that Volkswagen, which is owned by Porsche (the holding company), was set to take Porsche (the car company) public. On Thursday, we got a bit more insight into how the theoretical IPO is going, thanks to Reuters:

In the event of an IPO, Porsche AG’s share capital would be divided equally into preferred and common stock and up to a quarter of the preferred stock would be placed on the market, Volkswagen said, confirming an earlier Reuters story.

This involves a potential placement and free float of up to 12.5% ​​of Porsche AG’s total share capital, or more than €10 billion ($11.2 billion) using a valuation of around €90 billion.

The common shares, which would be solely owned by Volkswagen and Porsche SE under the plans, would not be publicly traded, a spokesperson said.

“The automotive industry is changing. Volkswagen is determined to play a leading role in a world of zero-emission and autonomous mobility,” said Volkswagen CEO Herbert Diess.

Volkswagen also indicated that all of this could go down from the fourth trimester of 2022. The conditions are very favorable for automotive conglomerates to turn flagship brands like Porsche into independent companies. As Barrons remarks, luxury brands tend to trade much more than their revenues compared to mainstream brands:

Sports car brands can achieve higher valuations than traditional automakers. Ferrari stock, for example, is trading at around 41 times estimated earnings for 2022. Volkswagen shares are trading at around 6 times earnings.

Add to that the IPOs of EV makers that tend to blow up — and Porsche being an early adopter, at least when it comes to legacy performance automakers — and it makes perfect sense that such a decision would be attractive to Volkswagen. Of course, absolutely none of this will render the entire corporate structure between the two names nor their stories easier to digest.

2nd Gear: military invasion, economic sanctions and supply chain crisis all rolled into one

Renault is already planning to halt production at its Moscow plant next week, for Reuters:

French carmaker Renault will suspend its car assembly plant in Moscow next week due to a “forced change in existing logistics routes” that is causing component shortages, it said on Friday.

Renault said production in Moscow would halt from Feb. 28 to March 5, adding that “tightened border controls in transit countries” also made it difficult to secure enough components. He did not name any country.

The automaker said it was exploring options to resume operations as soon as possible.

Russia happens to be Renault’s second best-selling market after France. Get used to these stories, because we’re probably going to see a lot of them. Speaking of…

3rd Gear: Also, Lada

Russia’s AvtoVAZ, which is owned by Renault and owns Lada, will stop assembly lines on Monday. Unlike Renault however, it expects to be operational again the next day. From Reuters, through Automotive News Europe:

Russia’s biggest automaker, AvtoVAZ, may suspend some assembly lines at its plant in Tolyatti, central Russia, on Monday due to a continuing global shortage of electronic components.

AvtoVAZ, controlled by French automaker Renault, plans to resume operations in Togliatti in full on Tuesday, he said.

The company declined to comment on new US sanctions against the Russian economy, saying it continues to monitor the situation.

Any sanctions imposed on Russia for its actions in Ukraine by the United States and its allies could affect Renault Group, Volkswagen Group and Stellantis. All three have significant operations in Russia.

I guess the time would have come for Putin to launch the Kalashnikov car.

4th gear: Stellantis says it costs 1.5 times more to Make a VE

Carlos Tavares, CEO of Stellantis revealed a number of things on the company’s latest earnings call. Among them, it apparently costs Stellantis up to 1.5 times more to build an electric vehicle than a car with an internal combustion engine. From Engine trend:

It costs 40 to 50 percent more to build an electric vehicle than a traditional vehicle with an internal combustion engine, according to Tavares. It’s a cost that can’t be fully absorbed by the automaker if it ever hopes to make a profit, nor can the added cost of manufacturing be passed on to the consumer in the MSRP. Tavares says Stellantis needs to cut internal costs and negotiate with suppliers who handle 85% of the auto parts chain.

It’s not the first time that Tavares has come out talk about the expenses involved in building electric vehicles.

Tavares went on to note that Stellantis’ ladder will make it easier to bridge that gap. This is as possible that production costs for electric vehicles will drop significantly over the next five years as more of the market is equipped to produce them and critical components, such as batteries. In the meantime, while I’m sure neither Stellantis nor the customers will bear the full cost here, I have a hunch which side will get the abrupt end to the case.

5th gear: Peugeot will miss Le Mans

Peugeot’s wingless 9X8 Le Mans Hypercar won’t be ready in time for the biggest event on the endurance racing calendar, Motorsport.com reports:

Peugeot technical director Olivier Jansonnie explained that the decision to postpone the car’s competitive arc “will give us the time we need to reach the necessary level of reliability” before the car is effectively frozen by the approval until 2025.

He added: “In this way, our planning will allow us to put the full weight of our teams and our resources behind our own test sessions, without disrupting the races at Spa-Francorchamps and Le Mans.

“Both operationally and in terms of reliability, Le Mans is the toughest race on the calendar. We will start with shorter races, which will allow us to gradually increase in strength in the championship.

The article notes that the earliest the 9X8 could make its competitive debut is at the World Endurance Championship round at Monza on July 10. So, it looks like the 24 Hours of Le Mans could be another wash in 2022, at least as far as the battle for overall victory is concerned. Fortunately, we can count on real competition for Toyota next year.

Reverse: “Dodge used a pair of spacesuit-clad presenters from the imaginary planet ‘Omni’ to promote the car.”

The 1978 Chicago Auto Show started 44 years ago today, February 25. Here are the highlights, courtesy of 365 days of driving:

Chicago Auto Show visitors flocked to see the Mercedes-Benz C-111 sports coupe with a turbocharged 5-cylinder diesel engine, which set three world records, averaging 156.5 mph on 10,000 miles. Also that year, Oldsmobile offered its Starfire Firenza, Holiday 88 coupe, and sport-colored Cutlass Supreme. Buick introduced a 75th Anniversary Riviera and Chrysler introduced their Dodge Omni/Plymouth Horizon front-drive subcompact. Dodge used a pair of spacesuit-clad presenters from the imaginary planet “Omni” to promote the car. Concept cars on display included the American Motors Crown Pacer, American Motors Gremlin GT, Chevrolet Black Sterling. Dodge Big Red and Ford Corrida from Ghia.

This was of course a few weeks before Earth-Omni relations deteriorated to an irreconcilable place due to Consumer Report’s Accusation of Omni and Horizon’s Handling Characteristicsthat’s why we haven’t had diplomatic relations with the Omnesian government since.

Neutral: What should replace Sochi on the F1 calendar?

With the announcement that the Russian Grand Prix will not take place this morning, things look ripe for Istanbul Park to find themselves on the schedule again for the third consecutive year, due to full circumstances and as an alternate delegate. eternal F1 track. . Turkey tends to produce strong races, but is there another circuit you’d rather see fill the vacancy? “No lead” is an acceptable answer too, because there is too many races now.

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