Porsche-Piech family diversifies investments away from struggling car businesses

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The billionaire family that controls Volkswagen and Porsche is targeting “larger investments” to further diversify away from its struggling automotive businesses.

Porsche SE, the Porsche-Piech family’s investment vehicle, said late on Tuesday that its portfolio of assets would be “dynamically expanded with further investments” to “further diversify the company”.

The decision comes as both VW and sport-car maker Porsche AG grapple with drastically lower sales in China, squeezed profits and contentious cost-cutting measures in their domestic German market, putting pressure on dividend payments to shareholders.

The Stuttgart-based investment vehicle has recently bought stakes in long-distance coach company Flix, which owns the Greyhound brand in the US, as well as drone maker Quantum Systems and Waabi, which develops software for self-driving trucks.

According to its website, Porsche SE’s first investment beyond its two carmakers was in 2014, when it acquired a stake in the US data provider Inrix. Out of the 19 portfolio investments listed on its website, 10 have been entered into since 2023.

In the past, the group has devoted “a low three-digit-million amount annually” to new investments, but the company said that “in the case of attractive opportunities, Porsche SE also sees itself in a position to carry out larger investments”.

The plans were announced on Tuesday alongside a reshuffle of Porsche AG’s board, following an unexpected decision earlier this month to end the contracts of the carmaker’s chief financial officer, Lutz Meschke, and Detlev von Platen, the group’s head of sales and marketing, early.

The move followed a power struggle between Meschke and chief executive Oliver Blume, who has come under growing scrutiny in his dual role as head of both Porsche AG and VW, and came amid concerns about the luxury brand’s approach to electric cars and sliding sales.

Meschke will be replaced by Jochen Breckner, previously head of Porsche AG’s corporate development, while Matthias Becker will take over from von Platen, having previously been in charge of sales in emerging markets.

Questions had loomed over how the sudden decision to terminate Meschke’s contract with Porsche AG would influence his position at parent company Porsche SE. He has been a board member responsible for investments since 2020, granting him a close relationship with the Porsche-Piech family.

Porsche SE on Tuesday confirmed that Meschke would stay in his role at the parent company and “push forward the activities in the portfolio segment with full commitment”.

The decision to terminate the contract of sales chief von Platen came as the carmaker’s sales in China slumped 28 per cent last year, as consumer interest in Porsche’s electric line-up weakened.

The dramatic slump in demand has prompted the sport-car maker to announce an overhaul of its future line-up. Earlier this month, it said it would plough €800mn into developing new combustion engines and plug-in hybrid models.

Two weeks ago, Porsche AG warned that it would cut 1,900 jobs in Germany, which it blamed on “the delayed ramp-up of electromobility”.

The troubles at VW and Porsche have spelled bad news for the Porsche-Piech family, whose wealth is largely tied up in the two automotive companies.

Porsche SE warned last year that it expected to write down the book value of its stake in VW by roughly €20bn — or 40 per cent — with a writedown of up to €3.5bn for Porsche AG.