Who owns Volkswagen?

Volkswagen is an automaker based in Wolfsburg, Lower Saxony, Germany. In 1937, the company was founded by the German Labor Front under the Nazi Party. It was established as part of a Berlin program to produce affordable cars for Germans. In 2023, Volkswagen Group delivered 9.24 million vehicles, up 12% from 2022. About 4.87 million cars, or 52.63% of the group’s 2023 shipment, had the VW badge. [1]

Volkswagen expanded its product variety and market presence to serve consumers globally. In 2017, the automaker switched its focus to electric vehicles (EVs). The company seeks to offer electric versions of its vehicle models by 2030.

In 2018, VW unveiled its all-electric ID R. The automaker extended the ID product line to include ID.4, ID.5, and the ID. XTREME1. However, manufacturing challenges threaten Volkswagen’s EV expansion.

In Nov 2023, the company halted production of the ID.4 and ID.5 for several weeks due to a lack of electric motors. VW has developed a new APP 550 motor powertrain to power its EVs. [2]

Volkswagen is one of the world’s leading auto brands. However, the company faces stiff competition from Toyota. The Japanese automaker sold 10.5 million vehicles in 2022 and defended its title as the best-selling auto brand for the third year.

In Nov 2023, Volkswagen Group warned that the VW brand is losing competitiveness. The company plans to cut costs and boost productivity to increase its return on sales from 3.6% last year to 6.5% by 2026. But who owns Volkswagen? [3]

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Who is Volkswagen’s Parent Company?

Volkswagen is owned by Volkswagen Group, based in Wolfsburg, Germany. Volkswagen Group is also the parent company of Porsche AG, VW Commercial Vehicles, Audi, Bentley, VW Financial Services, Lamborghini, Bugatti, Skoda, Seat, CUPRA, and Ducati. The group acquired a majority stake in Skoda. In July 2021, Volkswagen gave a 55% share of Bugatti to Mate Rimac Mate Rimac is the CEO founder of a Croatian company specializing in advanced battery and EVs. [4]

Volkswagen Group, VW’s parent company, has over 295,000 employees and 24 plants across Germany. Its importance for German and European economies can’t be overstated. The group is one of Germany’s top industrial employers. Thousands of suppliers globally rely on VW’s business and subsidiaries to earn a living.

In July 2022, Volkswagen announced plans to develop its first Gigafactory in Salzgitter, Germany. The plant will serve its new business unit specializing in batteries. In Dec 2023, Volkswagen Group laid the foundation for VW, Audi, Porsche, and Scout EVs to adopt the Tesla-initiated NACS charging connector by 2025. [5]

Volkswagen Group owns Volkswagen’s flagship brand. However, Porsche SE also plays a critical management role in VW’s operation. Porsche SE is an investment holding firm of the Porsche and Piech families, with a significant stake in the company. They also have controlling voting rights in Volkswagen. The brand is also linked to Porsche AG, one of the world’s largest automakers. In Sep 2022, Porsche AG went public through IPO at a $75.2 billion valuation and started trading on the Frankfurt Stock Exchange. [6]

Volkswagen’s Ownership History

Volkswagen traces its roots to Ferdinand Porsche, who built the Volksauto in 1933. This car featured an air-cooled rear engine, torsion bar suspension, and a beetle shape. Adolf Hitler sponsored a new, state-owned factory using Porsche’s design to produce affordable vehicles for the people.

Porsche’s team developed the 1938 prototype for the world-famous VW Beetle. This automobile marked the birth of the Volkswagen brand. In 2023, Volkswagen ranked 50^th on Interbrand’s Best Global Brands with a valuation of 15.14 billion. [7]

Volkswagen and Porsche collaborated to develop the 1969 VW-Porsche 914 and the 1976 Porsche 912E and 924. In 2002, the companies produced the Porsche Cayenne by borrowing the chassis of the VW Touareg and the Audi Q7. Several members of the Porsche and Piech families sit on VW’s supervisory board.

Wolfgang Porsche is the Chairman of Porsche AG and Porsche SE and a Volkswagen board member. In May 2023, Wolfgang announced his bid for another term on VW’s supervisory board. [8]

Volkswagen’s Shareholder Structure

Porsche and Volkswagen merged to integrate their manufacturing operations. In Dec 2009, Volkswagen acquired 49.9% of Porsche AG for €3.9 billion. The group exchanged 50.76% of the VW business with Porsche SE for management positions in Porsche SE and Porsche AG ownership. In Jul 2012, VW acquired the remaining 50.1% stake in Porsche AG for €4.5 billion. The deal made Por#3366ff;sche AG and Volkswagen sister companies under the Volkswagen Group umbrella. [9]

Volkswagen’s owners hold 206,205,445 preferred shares and 295,089,818 ordinary shares. As of Dec 2022, Porsche SE was Volkswagen AG’s largest shareholder, with a 31.9% share. This stake gives Porsche SE control over the Volkswagen Group. Foreign institutional investors are second with 22.2%, followed by private shareholders at 21%, the State of Lower Saxony at 11.8%, and Qatar Holding LLC at 10.5%. German institutional investors close the top 6 list with 2.6% of Volkswagen AG’s shares. [10]

Only ordinary shares have voting privileges. As of Jan 2023, Porsche SE controlled 53.3% of Volkswagen AG’s voting rights. The State of Lower Saxony is VW’s second-most influential shareholder, with 20% voting rights, followed by Qatar Holding at 17%. The remaining 9.7% is free float owned by private investors. [11]

Volkswagen is shared by Volkswagen Group, Porsche SE, institutional investors, and private shareholders. The Porsche and Piech families control Volkswagen through their Porsche SE firm, which holds most of the voting rights in the Volkswagen Group.

In Sep 2023, Chairman Wolfgang Porsche defended the families’ majority stake in VW after the automaker’s share price dropped to a three-and-a-half-year low. The Chairman linked VW’s low valuation to corporate governance issues fueled by the group’s complex ownership structure. [12]

Porsche’s 2022 IPO added corporate governance issues to Volkswagen Group’s shareholder structure. Investors seeking to reap from the Volkswagen Empire can buy equity in Porsche AG, Volkswagen AG, Porsche SE, or VW’s trucking business Traton SE. This complex web of crossholdings, share listings, and individual responsibilities increases the risk of conflicts. Lower Saxony state has veto rights on issues such as takeover offers. Shareholders will also deal with the IG Metall metal workers union’s influence at Volkswagen and the feisty Porsche and Piech dynasty. Differing share classes and overlapping shareholdings can discourage some investors from investing in Volkswagen. [13]

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