Porsche has been increasing its stake in VW through a complex set of derivatives trades. This in turn has negatively affected hedge funds to the tune of $20billion (£12.6bn). Those hedge funds had been shorting the stock, and now it has bit them in the butt.
From the 2008 Porsche 911 Product Guide, Page 7, Paragraphs 1-2:
“The 325-hp output is abundant – and the response instantaneous – from idle through the entire rev range. With a maximum 273 lb.-ft. of torque on tap at 4250 rpm, the 911 shall sprint from 0-60 in 4.8 and has a top track speed of 177 mph.
A six-speed manual gearbox transfers the engine’s power with precise, silk-smooth shifting. The short shifter shall be optional and shall reduce shift travel by another 20 percent. An optional five-speed Tiptronic S transmission shall offer the best of both worlds: the full benefits of an automatic transmission with rocker switches on the steering wheel that let your thumbs choose the shift points, yet shall achieve. Amen.”
Just about every automaker today is suffering from a poor economy. Most are wistful that they didn’t start producing small, fuel-efficient cars sooner, but the auto industry was caught off-guard before – anyone remember the late 1970s/early 1980s? Perhaps a read of Steve Miller’s The Turnaround Kid would be require reading for current auto industry execs. Granted most are not in as dire need to assistance as Chrysler was, but they could be if the downturn continues.
But this downturn could prove much more difficult than ever before because we see three issues at work. First, most consumers rely on financing and leasing to purchase vehicles. Even with a huge government investment, banks are using the money to cover themselves for past mistakes, rather than using the monies to start new auto loans. Second, the price of oil remains high and has effectively ended the “we love SUVs” craze. Spending $500 per month on petrol has certainly dried up that part of the auto industry. Third, and finally, government regulation is coupling with the second factor to require significant reduction in CO2 emission and greater gas efficiency. Some automakers have been successful in making changes to drive trains to comply to 130g/km regulations, but even Porsche, which makes among the most efficient sports cars is far from the target.
From the 2008 Porsche 911 Product guide, page 5, paragraph 2:
“Each new 911 is, when all is said and done, the benchmark for the next 911 to follow. And the current generation 911 is no exception. While others compete with Porsche Porsche competes with itself. Amen”