VW Group Could Spin Off Premium Brands

Volkswagen CFO Frank Witter didn’t say no to the idea of selling shares in the company’s luxury unit. A move that could add big value for VW Group investors.

Witter was asked the question during a Bloomberg webinar last week. “It is a legitimate question, without a doubt,” he said. Which isn’t exactly a yes either.

The company is currently working on an IPO for the heavy-truck division that includes Man and Scania. It’s also trying to help the brands work together more efficiently, reducing costs and boosting margins.

“Every other consideration might be down the road, but it’s currently not a priority the management is working on,” Witter added, which comes across as probably a maybe. It’s definitely not a no.

Despite record sales and profits last year, the company stock is still down 19 percent this year. A look at moving the higher-margin luxury brands to a separate listing could boost company value. Like the price to earnings ratios of Volvo and Ferrari, much higher than VW’s.

Bloomberg suggests that a super premium brand group including Lamborghini, Porsche, Bentley and Bugatti could be worth $139 billion, double the valuation of the entire VW Group today.

[source: Bloomberg]