By the way Volkswagen shares declined 22,66% today.
Last month, Porsche surprised the world by announcing it had acquired a nearly 43% stake in Volkswagen with an option to buy 32% more. Without anybody noticing, ‘wee little’ Porsche, maker of scarcely 100,000 cars a year, had cornered a 75% position in VW, which cranks out nearly 6 million vehicles. Source: Los Angeles Times
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Nov. 25 (Bloomberg) — Porsche SE, the maker of the 911 sports car, said it will suspend production at its main plant for seven days to help cope with dwindling auto sales.
Porsche fell the most in a month in Frankfurt trading after the company said today it will idle the factory in Stuttgart, where it is based. Production was also halted for one day last week, the carmaker said in a statement, without specifying on which days the other closures will fall.
“I don’t think that Porsche’s customers have suddenly fallen into poverty, but they’re reacting to the fact that it may be inappropriate to pull up in a new Porsche when their neighbor’s house is being foreclosed,” said Christoph Stuermer, a Frankfurt-based analyst with research firm IHS Global Insight. “It’s an appropriate reaction.”
Wages won’t be affected by the shutdown because of overtime working already banked by workers, Porsche said. Volkswagen AG, Europe’s largest carmaker, said earlier it may halt production at its hometown plant in Wolfsburg, Germany, for more than three weeks starting next month to help cope with shrinking markets. Porsche has a controlling stake in the larger company.
“Porsche, too, cannot escape the current downward trend in the automobile industry,” the company said in its statement, reiterating that unit sales in the year ending July 31 won’t match the 98,652 cars delivered in fiscal 2008.
Porsche declined 5.66 euros, or 10 percent, to 50.34 euros and was trading at 51.83 euros as of 4:37 p.m. local time. The stock has lost 62 percent this year, giving a market value of 9 billion euros ($12 billion).
To contact the reporter on this story: Andreas Cremer in Berlin at [email protected].
Last Updated: November 25, 2008 10:55 EST
By Andreas Cremer
Source: Bloomberg