(Bloomberg) – Billionaire families controlling Porsche AG and Volkswagen are focusing on major investments in the defense industry as automakers work on increasing trade tensions and gentle demand.
It said Wednesday that Porsche auto company SE SE, a listed holding company of the Porsche-Pick clan, is considering a third long-term anchor investment in industries that overlap with industrial technology.
“We are also studying defense, we are also studying infrastructure,” said Johannes Lattwein, head of finance, when discussing the revenue of the Porsche SE.
The family is considering the move when Volkswagen and Porsche compete with China’s sales drop and the threat of U.S. tariffs. The holding company cut its dividend Wednesday after reporting a net loss of 20 billion euros ($21.6 billion) for non-cash damages related to Volkswagen and Porsche Holdings. Oliver Blume, the two automakers, has put more pressure on them.
Entering new industries may prove profitable as Germany prepares to release hundreds of billions of euros in defense and infrastructure spending. The measures passed final legislative barriers last week, indicating a new spending period aimed at promoting Europe’s largest economy and modernizing squeaky infrastructure.
Porsche SE denied a Bild report, saying the family is considering reducing its 53% stake in Volkswagen. Any decision requires consensus within the clan, which points out dozens of descendants, few of whom play an active role in the automotive business.
“I can say blank, there is no idea to peel off from our core holders,” Hans Dieter Pötsch said on Wednesday.
It said on Wednesday that the Porsche SE has 2 billion euros ($2.16 billion) in liquidity and does not intend to assume additional debt from another investment. Lutz Meschke until recently served as Chief Financial Officer of Porsche Automakers, where he served as the management committee of the holding company and oversees the expansion of its non-core portfolio.
(Update details about German defense spending in paragraph 4.)
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