Porsche busy hiding financial wounds

Porsche busy hiding financial wounds

Porsche VW logo

It’s a confusing time in the automotive world, and it has become tough to know who is doing well and who is in trouble. For the past few years, Porsche has looked very strong, selling plenty of cars, and quickly gobbling up shares of German juggernaut Volkswagen. But the tables have turned and dried-up credit markets and slowing sales have conspired to put a big wrench in Porsche’s plans, though.

It was recently revealed that Porsche has ditched its plans to take over VW and instead plans to merge the two companies (read news item). Now, German magazine Der Spiegel is reporting that times have been so tight at Porsche that it actually just escaped bankruptcy for three days in March. The German automaker received a 700 million euro loan from VW to stay out of trouble, but needs another 2.5 billion euros to stay in business. Porsche has tried to convince the German government to offer more loans to help scale down the enormous debt it had incurred in attempting to buy VW.

Amazingly, Porsche which sells fewer than 100,000 vehicles per year, has accrued an astonishing 9 billion euros worth of debt. That’s 50% more debt than Chrysler.

Porsche VW logo

It’s a confusing time in the automotive world, and it has become tough to know who is doing well and who is in trouble. For the past few years, Porsche has looked very strong, selling plenty of cars, and quickly gobbling up shares of German juggernaut Volkswagen. But the tables have turned and dried-up credit markets and slowing sales have conspired to put a big wrench in Porsche’s plans, though.

It was recently revealed that Porsche has ditched its plans to take over VW and instead plans to merge the two companies (read news item). Now, German magazine Der Spiegel is reporting that times have been so tight at Porsche that it actually just escaped bankruptcy for three days in March. The German automaker received a 700 million euro loan from VW to stay out of trouble, but needs another 2.5 billion euros to stay in business. Porsche has tried to convince the German government to offer more loans to help scale down the enormous debt it had incurred in attempting to buy VW.

Amazingly, Porsche which sells fewer than 100,000 vehicles per year, has accrued an astonishing 9 billion euros worth of debt. That’s 50% more debt than Chrysler.

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