Porsche-Piëch family seek tie-ups on defence investment
Holding company in control of Volkswagen and Porsche is diversifying away from auto sector
The billionaire family that controls Volkswagen and Porsche is courting German family offices to team up on investments in the defence sector, as it aims to become less dependent on its struggling automotive division.
Porsche SE, the Porsche-Piëch family’s holding company said on Wednesday that it was seeking “other investors and strong partners” to invest in defence start-ups alongside it, in a bid to tap into soaring European military spending.
It added the group would “build a platform for investments in up-and-coming technology companies” in the sector, and was planning a “defence day” to bring together “German and European family offices” that might be interested.
Its comments come after the Stuttgart-based investment vehicle said earlier this year it had earmarked up to €2bn for defence, and wanted to make a new “core investment” alongside its controlling stakes in the two carmakers.
European military budgets have surged in the wake of Russia’s full-scale invasion of Ukraine in 2022, and US pressure on Nato countries to shoulder more of the burden for their own defence needs.
A Porsche SE spokesperson told the Financial Times there was a “need to rally all parties” in light of the escalating geopolitical situation in Europe.
In a statement, chief executive Hans Dieter Pötsch said the group’s aim was to “increase our involvement in the defence and defence-related sectors while maintaining our core focus on mobility and industrial technology”.
The moves comes as both VW and sports-car maker Porsche AG contend with sinking profits amid Donald Trump’s trade war and waning Chinese demand.
Last year Porsche SE wrote down its stake in Volkswagen by €19.9bn, and took a €3.4bn hit on its stake in Porsche, in one of the largest impairments in German corporate history. Shares in Porsche AG, which listed in Frankfurt in 2022, have fallen 31 per cent over the past 12 months, while Volkswagen stock has risen by 6 per cent.
Porsche SE said a weaker outlook for the two carmakers would weigh on its earnings this year, cutting its forecast for adjusted post-tax profits to a range of between €1.6bn and €3.6bn, from previous guidance of €2.4bn and €4.4bn.
Besides its automotive holdings, Porsche SE has already made investments in companies that specialise in “dual-use” technologies, with both civilian and military applications, including German rocket start-up Isar Aerospace and drone-maker Quantum Systems.
Any investment in the defence sector, not just those by Porsche SE, could produce “an innovation boost in Germany” that would spill over into the civilian sector, the company told the FT.