27 Nov 2008

Porsche set to delay VW takeover

6:09 am on 27 November 2008

Porsche has pushed back a planned takeover of Volkswagen because of falling sales.

The German luxury carmaker said it might not take majority control of VW this year and that it would not pay "ridiculous" prices.

Porsche also reported pre-tax annual profits of 8.57 billion euros ($US11.1 billionn) after the most successful year in its 60-year history.

However, Porsche said its earnings for the four months to November would be 15% lower than a year ago because of the downturn.

On Monday, Porsche said it had stopped assembly lines for one day at its main plant and would halt production for seven more work-days up to the end of January because of weaker demand.

Elsewhere, in further signs of falling car sales, Toyota said it would close a factory in France for two weeks in December, and would slash production at the plant from next year.

Porsche said it was standing by its plan of increasing its stake in VW to 75% in 2009.

However, Mr Wiedeking said Porsche might not exceed the 50% ownership mark by the end of this year as it had planned.

Porsche already has effective control over the company and wants to take full control over strategic decisions and VW's profits next year by raising its stake.

However, German law and VW's statutes give VW's home state of Lower Saxony the right for now to veto these plans with its own 20% stake.