Volkswagen Says It Will Sell Assets In Case It Can't Repay Loans - What Brands Go First?

Seat, Skoda, Scania, Man and Bentley

Whatever isn't profitable and strategic. Without access to VW's financials, I can't tell you which entities fall under that description.

In order to sell an asset, there has to be a buyer and a market.

I'd argue that many of the VW brands are not worth anything significant outside of the VW umbrella.

In fact, the only one that is truly salable is Porsche. If they have a significant cash crunch, that will be the first to go.

Everything else is either not worth anything (Bugatti and Bentley) or cannot exist on a standalone basis outside of the VW parts-sharing empire (Audi, Skoda, Seat, Bentley, Lambo, Scania, etc). Basically all of the "badge-engineered" brands cannot economically exist on a standalone basis, outside of being part of the VW corporate entity.

Bentley and Bugatti and Lambo may have marquee brand names, but there is not a stand-alone business case for them ourside of VW. If VW goes belly up, they will become SAAB'd and disappear.

Pretty much on the mark. Sell the trucks first to whoever will by them. Porsche and Bentley, probably to a Middle East or Chinese firm with Lambo thrown in. The badge engineered Skoda and Seat need the Pontiac/Oldsmobile treatment as VW emulates the One Ford strategy worldwide. Audi stays as a hook into the lux market. Without the Touareg, VW would have to get serious in a hurry about that crossover they have been teasing for years, making VW and Audi variants.

Porsche could be spun off as a public company loaded with VW debt and VW remaining largest shareholder. This allows VW to get cash short term and be in a position to bring Porsche back into the fold again sometime down the road. Other possibilities...Bugatti to a Saudi prince, truck division (Scania) to Penske or lesser brands(Seat, Skoda) to Chinese who might overpay for European distribution.

Interesting approach.

Group Porsche, Bentley, and Lamborghini and sell them to Hyundai/Kia.

H/K has the deep pockets to keep them going and Porsche is an engineering juggernaut that H/K could benefit from.

Kill Bugatti, Seat, and Skoda.

Reposition VW in the Skoda segment.

Reposition Audi as a near-premium.

Bentley as I'm sure the Chinese (or Koreans) would be more than happy to overpay for it. BMW got the best parts of B/RR anyway.

Check sales...VW won.

Let Porsche buy it's way from under the vw umbrella. Porsche is extra profitable and a few years ago was about to buy vw. Porsche has the product and the profitability. Let them do their thing.
T

Don't discount the value of Bentley, it is profitable already with more profits coming from the SUV sales.

"Absent" - how do you know Bentley is profitable and on what basis?

The VW annual report http://annualreport2014.volkswagenag.com/divisions/bentley.html
states the following...

Gross sales for 2014 were 1.7 billion Euros over 11,033 vehicles of which 884 were Mulsannes and the rest were Continental/Flying Spurs, which works out to an AVERAGE of Euro 154,000 per vehicle (including the Mulsanne's), which would be the average price at which the vehicles went to the dealer, less manufacturer incentives. Euro154,000 at 12/31/14 = $US185,000)

Although the earnings note indicates that "operating profit" was 170MM Euros (curiously an even 10%) we have no idea what costs went into or were excluded from that number due to intercompany cost allocations.

Considering most Bentley's retail sticker in the $225,000 to $275,000 range) vs the average cost of $185,000 or so , that perhaps indicates Bentley is offering some serious discounting to move the metal.

I'd argue Bentley is in trouble even before Diesel-gate.

VAG should scuttle Seat and Skoda and Bugatti. Porsche is the only real valuable asset VAG has. Bentley might be a distant second. Maybe VAG should spin off Porsche in the same way that Fiat is spinning off Ferrari. Perhaps put Porsche and Bentley together as an IPO on the stock exchange selling off a limited amount of shares. Depending upon VAG future cash flow needs they could spin off more shares as needed. It is then just Audi and Volkswagen. Audi does all the engineering for both marques. Both offer gas hybrids and full EV's as the future.