How Volkswagen became a behemoth? Currently owns Audi, Porsche, Bentley, Lamborgini
Volkswagen Group is a German-based multinational automotive manufacturer which specializes in designing, manufacturing and distributing
- Passenger vehicles
- Commercial vehicles
- Motorcycles
- Engines
- Turbo machines
- Financing
- Leasing
- Fleet Management
Volkswagen has a tricky history as it was founded by the German Labour Front in 1937, which was the labour organization under Hitler’s Nazi Party. It was a company accused of forced labour from Jewish concentration camps and contributing to Nazi Germany’s war efforts.
However, the redemption arc of Volkswagen has been nothing short of impressive. With a revenue of EUR 250 Billion in 2021, they were ranked number 8 of the Fortune 500 companies. Volkswagen AG has an Employee count of more than 660,000. The Group holds the largest market share for automobiles in Europe and is the 2nd largest car manufacturer in the world.
Volkswagen Group owns several legacy automobile, motorcycle and truck brands, including
- Lamborghini
- Porsche
- Bentley
- Audi
- SEAT
- Skoda
- Cupra
- Ducati
- Traton
The Beetle car produced by Volkswagen became a hit, and demand soared in the 1950s and 1960s, helping Volkswagen acquire a sizable war chest. Here’s a fun fact, the Beetle car was designed by Ferdinand Porsche, founder of the Porsche automobile brand.
Audi Acquisition
In 1965, Volkswagen acquired Auto Union GmbH from Daimler-Benz. This subsidiary was responsible for producing the Audi F103 series, the first Audi models to be manufactured after the World War.
SEAT Acquisition
In 1982, Volkswagen signed a cooperation agreement with Spanish car manufacturer SEAT intending to expand outside Germany. In 1986, Volkswagen Group acquired a 51% controlling share of SEAT, and they increased their stake in this company to 75% by the end of the year. In 1990, they made SEAT a wholly owned subsidiary of Volkswagen by buying up the remaining equity.
Skoda Acquisition
Further international expansion had Volkswagen signing a joint-venture partnership with Czech car company Skoda in 1991. This was accompanied by a 30% acquisition of stake in that company 1 month later. In 1994, Volkswagen increased its stake in the company to 60% and then became a 70% owner of Skoda in 1995. In 2000, Volkswagen group bought over the remaining 30% of Skoda, making it yet another wholly owned subsidiary of the Group.
Bentley Acquisition
The Bentley acquisition was a complicated affair. In 1931 Bentley was acquired by Rolls Royce. In 1997, there was a bidding war between BMW and Volkswagen to purchase Rolls Royce Motors, which had been put up for sale by Vickers, a British Engineering company owner of that time. BMW offered GBP 340 Million to Vickers. However, Volkswagen outbid them with GBP 430 Million.
Volkswagen Group purchased both Rolls Royce and Bentley from Vickers in 1998. However, there was a catch. While Volkswagen’s acquisition covered production and administration facilities, the model nameplates, the Spirit of Ecstasy trademark, the Rolls Royce grille shape trademark and vehicle designs, they didn’t have the Rolls Royce name or logo. The ownership documents of Rolls Royce Holdings PLC stated that the Aero-engine making division of Rolls Royce (which was separate from the Automotive division) would retain a few essential trademarks, including the name and logo, if the automotive division was sold.
This led to a huge battle between the parties involved. Finally, Volkswagen and BMW negotiated a deal where the former sold the Spirit of Ecstasy & Grille Shape trademarks to BMW. Bentley remained with Volkswagen Group and continues to do so to this day.
Lamborgini Acquisition
In 1998, Italian Supercar Brand Lamborgini was owned by Indonesian Businessman Hutomo Suharto (60%) and Malaysian company Micom Setdco. Volkswagen’s subsidiary Audi AG acquired Lamborgini for an estimated USD 110 Million. This made Volkswagen the 7th owner of Lamborgini.
Porsche Acquisition
Volkswagen initially purchased 49.9% shares of the Holding company of Porsche AG, Porsche Zwischenholding GmbH in 2009. Then in 2012, Volkswagen bought the remaining stake in Porsche AG. In 2022 Volkswagen made 25% public during the Porsche IPO, which helped them raise EUR 19.5 Billion which would help Volkswagen further their march towards electrification.