Copyright © 1998

Porsche Club of America Out For A Spin July, 1998 Bruce Corwin Bruce968@PorscheNet.com

Porsche's claim to fame is building sports cars. That's what they're known for, that's what makes a Porsche special. When someone tells you they drive a Porsche, you immediately know what that means. After 50 years, all that is about to change.
 
Porsche & VW have confirmed their plans to make an SUV for model year 2002, manufactured by VW and using a VW truck platform. Eighty percent of the SUVs will have a VW badge, 20 percent Porsche.
 
Just because BMW, Mercedes and everyone else are making SUVs doesn't mean Porsche has to have a "me too" entry in an already overcrowded market. Ferrari doesn't make an SUV. Lamborghini used to make an SUV (the LM002), which was a very high-end machine, but that's okay for Lamborghini because they started out making tractors. Come to think of it, Porsche used to make tractors too. Skip that argument. I guess PCA will just need to come up with some off-road activities to cater to the Porsche SUV crowd.
 
While Ferrari and Maserati are owned by Fiat, Porsche remains as the last independent sports car maker in the world. With the economic boom and all the mergers and acquisitions going on, independence is a rare thing these days. Let's take a quick trip through Europe to review the latest action.
 
We'll start in Italy where Audi (which is owned by VW) has signed a letter of intent to buy Lamborghini for around $111 million. The son of former Indonesian President Suharto and a Malaysian group purchased it from Chrysler in 1993. Lambo production for 1997 consisted of only 225 Diablos.
 
Meanwhile, in jolly old England, VW's $713 million bid beat BMW's $564 million to buy Rolls Royce and Bentley from Vickers, plc. The takeover is expected to be completed this month. According to the Britain Sunday times, VW plans to develop a baby-Bentley to compete with Mercedes S class and BMW 7 series, thereby increasing annual production from 2000 to 60,000 cars. VW is also under negotiations to buy engine manufacturer Cosworth from Vickers for about $180 million.
 
Competition goes both ways though. BMW owns quite a bit of Rolls-Royce Aerospace, who owns the name Rolls Royce and could cease to license the use of that name after VW buys the company. BMW also supplies engines to Rolls Royce. As if that's not enough, back in Germany, BMW plans to build a super-luxury car to compete with Rolls Royce, but will badge it something other than "BMW."  Meanwhile, Mercedes (which just merged with Chrysler) is expected to reach a decision any day now about its plans to compete in the same market with their Maybach super-luxury car.
 
Let's head over to France now. Stern Magazine in Germany reports that VW plans to buy Renault, primarily for its truck division, which is the third largest manufacturer of commercial vehicles in the world. Thus far, Renault is denying the rumors.
 
I don't know where VW is getting the money to buy all these companies, but if the bubble bursts and the economic downturn that has begun in Asia continues throughout the world, Volkswagen's empire may turn out to be a house of cards.