Don't misunderstand. If these companies were only liabilities, companies like VW could R&D on lower end cars. I'm sure premium companies like porsche take care of themselves, but with such low volumes, their overhead is very high per car, and they are not very recession-proof. These lines compliment a major manufacturers portfolio better than they stand on their own. If VW only makes 3%, but sells 100 times as much as porsche, it becomes a low income brand. It also doesn't take a hundred times as many factories to produce a hundred times as many Golfs. In the porsche/audi/Volkswagen example, VW can use its manufacturing capability to make producing porsche and audi more cost effective. It can test new tech on their lower production premium lines before bringing it to their main sellers (vw's DSG). On their own, premium lines have a harder go of it...but not impossible (BMW, MB, McLaren).
|