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Volkswagens' plans to deliver a sub-Golf sized car to the U.S. market has stalled as the German automaker considers allowing rival DaimlerChrysler [DCX] to import the car instead and sell it under the Dodge label. VW dealers are naturally unhappy about the move, but much more is at stake than what is evident. Will the Polo still show up? If not, why not?

The world of automobile marketing has changed drastically in the last generation. Gone are brands that are purely set behind national borders and localized brands. Instead, vehicles are being sold that wear one label but are actually built by another manufacturer. Globalism is here and automakers have openly embraced these changes.

Volkswagen's Polo is a likely entry into the U.S. market as a model that would fit nicely below VW's Golf in its American line up. Many manufacturers are changing their car lines to allow for smaller cars to become the new entry level vehicles in their fleets. Here are some examples of cars that recently were introduced or soon will find their way into car lines:

Chevrolet: Korean automaker Daewoo, a GM subsidiary, supplies the Aveo for Chevrolet. This bottom rung car is positioned directly below the Cobalt.

Honda: After 35 years, the Civic will no longer be the entry level model for Honda. An even smaller car, the Jazz, will be imported in about one year's time.

Mercedes: Yes, even a luxury automaker such as Mercedes is contemplating bringing in one or two lines of cars smaller than its current "baby" Mercedes line, the C Class cars.

BMW: Ditto for the another German luxury make.

Dodge: With the Neon replacement Caliber soon to appear, Dodge is still looking at offering a car smaller than the Caliber for their fleet. With DCX's Mitsubishi relationship scuttled, the Japanese automaker can no longer be relied upon to supply a steady stream of entry level cars for The Chrysler Group.

Enter Volkswagen.

Yes, an unlikely supplier for DCX is Volkswagen, a strong competitor for DCX's Mercedes division in Europe. However, VW has its own needs - a minivan - and The Chrysler Group will allow VW to market a rebadged version of its minivan in the US. In exchange for the minivan, Dodge gets to market the Polo a tiny 1.2L powered four passenger car that should see city gas mileage of around 35 mpg and highway mileage of just over 50 mpg.

The current Polo is marketed in Europe as three or five door hatchbacks which is not a popular body style in the U.S. VW may ship a specially reconfigured four door sedan instead to ensure interest in the this model within the U.S. market.

Although VW appears committed to this special arrangement with DCX, the Polo could still be sold here as a Volkswagen too. By keeping the hatchback style for VW branded cars only, the Polo might still be available through VW dealers. Include the optional 1.9L turbo diesel and fuel mileage will soar well past sixty miles per gallon. No wonder VW dealers are aching to see the car imported!

Matt Keegan is a contributing writing for PitStop Auto Parts covering http://www.pitstopautoparts.com/oem-volks-parts.html Volkswagen Parts; http://www.pitstopautoparts.com/1-lebra-car-bra.html Lebra Car Bra; and http://www.pitstopautoparts.com/1-ventshade-visor.html Ventshade Visor.

Porsche to Buy Additional Volkswagen’s Stakes But With Conditions

The move by tiny sports car maker Porsche to take control of the giant Volkswagen group by means of purchasing a great part of stakes of the German giant automaker has proven that the force of private equity can still be defeated.

Volkswagen has been brought back from the private equity brink by something more powerful than a heap of cash and that is FAMILY. The Porsche and Piech families that control Porsche have effectively waged their company on a move to bring together the two German car makers that owe their existence to the families’ common grandfather, Ferdinand Porsche.

According to the German media centers, speculations are high on the possibility of Porsche and the families’ Porsche distribution company in Austria and Volkswagen to join together. Porsche has received a warm welcome at Volkswagen where the supervisory board is chaired by family member Ferdinand Piech who is at the same time Volkswagen’s chief executive. His protégé, Martin Winterkorn has been promoted from head of Audi to Volkswagen’s CEO.

There are a lot of sentiments involved between the two parties in the sense that there are extensive business links between the two companies which are extremely valuable to Porsche. If ever the said merger will happen it will give Porsche the opportunity to revamp Volkswagen’s lines of automobiles and at the same time get to share in the gains. It should be noted that Porsche only makes as much as 100,000 cars per year compared to the more than 5 million vehicles produced by giant German automaker.

Porsche already owns 27.4 percent stakes at Volkswagen and at the recently held shareholders’ meeting in Stuttgart, Porsche was successful getting the majority vote of the shareholders to approve the additional 50 percent increase in stakes or equivalent to 8.75 million shares. This would now give Porsche directors the opportunity to raise their stakes or shares in Volkswagen to more than 8.8 billion EURO or $14.7 billion. The said amount of shares is said to be enough to buy an additional 30% of Volkswagen thereby discouraging other prospecting investors from taking control of the giant German automaker. However there is still no certainty that Porsche will make s full bid but all options including the reverse takeover by Volkswagen is still very much open.

It was in the year 2005 when Porsche was able to purchase 27.4% stake in Volkswagen. The said purchase was initiated by Porsche CEO Wendelin Wiedeking who was also responsible for the healthy financial standing of Porsche.

Wiedieking is continuously driving the company hard, expecting nothing less but productivity gains of between 6 and 8 percent each year. Porsche made about 1 billion EURO on revenue out of its 7.3 billion EURO gain for the inclusive years 2005-2006. On the other hand, Volkswagen has earned 1.1 billion EURO of revenue for the year 2005 out from its 95.3 billion Euro of total profit.

Porsche has chosen Volkswagen after it has failed in its search for a new foundation shareholder. Volkswagen was valued at about 12 billion EURO on the market. It was fortunate for Porsche that Volkswagen was not taken over by other companies or else they could have ended as a big loser. Volkswagen has become Porsche’s largest supplier and has been on project s together like for example in creating the Cayenne sport utility vehicle. The partnership with Volkswagen has enabled Porsche to accomplish things that it would not otherwise been able to afford on its own.

The clincher for Porsche was the expected gains that it will make by revamping the straggling Volkswagen Group. After long years of being a partner of Volkswagen, Porsche is very confident that the restructuring plan at the German automaker will generate handsome returns for it. Weideking is also very excited with the prospect of joint venture with Volkswagen. He could barely conceal his excitement at the Detroit Motor Show this month.

"We believe there is huge potential for productivity gains in VW," he said. "We want to take it because it is a goldmine."

But before Weideking commits into buying more shares at Volkswagen he wants first a favorable decision from the European courts on Germany’s fabled Volkswagen Law. This Volkswagen Law limits a shareholder’s rights from exercising a maximum of 20 % on VW’s shares. The said Law was designed to preserve the influence of the state of Lower Saxony, which has held 20% of VW’s shares for decades. The court will hear the case on February13 and if ever the said VW law is struck down then that will be the time for Porsche to finally be able to out-vote the State of Lower Saxony and then rid the VW supervisory board of the interminable political debated that has ruined business decision making.

"As the biggest shareholder we will have more influence over VW. We want to work closely with VW. We think we can do projects with VW's different brands: VW, Audi, Bentley… We want to keep our hand on VW," Wiedeking said.

The German Automaker, Volkswagen

Volkswagen before it became a large corporation as it is today has started out as a concept of a brilliant guy who wants to provide his fellow countrymen with a quality and yet affordable transport. Ferdinand Porsche has dreamed of creating a people’s car or Volkswagen in German. And he accomplished in the year 1934 when he developed his masterpiece- a beetle shaped sedan that was called Volkswagen.

The Beetle made its debut after two years due to the surging war in Europe. Its production was delayed until 1949 but the wait is all worth it since The Beetle later become of the world’s best selling car of all time. Aside from the Beetle, the Volkswagen bus has also made a reputation of its own as a symbol of generation while the Golf was branded as a modern masterpiece.

Besides creating world renowned vehicles, the German automaker was also known for its top-of-the-line Volkswagen aftermarket parts which are offered by various reputable auto parts dealers worldwide.

About the Author

Growing up with three brothers, Natalie Anderson became exposed early to the world of automobiles. This 29-year-old account manager now dreams of having her very own top-of-the-line vintage car.

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