In news from German auto manufacturers VW and Porsche, Porsche CEO Wendelin Wiedeking resigns after midnight meetings with board members. According to the new from the Bild, Wiedeking will be leaving €50 million richer, and VW will add yet another prestigious brand to its already impressive stable of car labels. Whether the move is a power PR move or a rock solid attempt toward VW becoming the world’s leading auto conglomerate remains to be seen, but Porsche is now in a much more stable condition with VW than without them for sure.

Porsche has accumulated a staggering debt of over €9 billion over the last few years, most of which will be wiped clean by the VW deal and a correlative investment of €5 billion out of oil-rich Emirate Qatar. Ironically, Wiedeking and Porsche had been in a struggle to turn the tables of such a deal, and in trying to take over VW, Porsche evidently wasted a great deal of money. Sales for the luxury auto maker have fallen dramatically in the wake of worldwide financial crises, and now the stronger brand appears to be VW. The combination of cash rich VW (reserves estimated at 11 billion euros), the new fund out of Qatar, and the State of Lower Saxony (the second top investor), combined make for a fairly healthy bank for building a future at VW. The Qatar connection in this deal has not been verified, but auto enthusiast Sheikh Hamad bin Khalifa Al-Thani is rumored to be the man behind all these deals.

Vying for the top spot among the world’s auto companies, VW is on a collision course with Japan’s Toyota. GM, now for all intents and purposes, dismantled and out of the picture, was the only other obstacle in the path of the German auto maker which is now the top manufacturer in Europe. VW also has a large stake in the Chinese auto market, now perhaps the world’s strongest and fastest growing. However, to threaten Toyota, VW will have to gain a greater stake in the US auto sales showrooms where it currently only holds a 1 percent stake compared to Toyota’s 16 percent piece of the pie. Regardless, the PR value of taking over Porsche, combined with moving into the number two spot, can only make VW a force to be contended with.

If VW had been successful in grabbing Chrysler out from under Italian auto maker Fiat, this scenario would have been all the more interesting. Regardless of the implications and projections however, all auto makers still have a big hurdle to overcome, an ever stagnant world economy. Still, competition is the benchmark of progress and VW’s strong record and popularity, combined with actually having some money and credit, should give some headaches to shareholders at Toyota. Good news in the auto industry is hard to come by these days, so news of this impending deal can only be seen as positive.

By EPR