Porsche shares rose to their highest level in five weeks

Article by Christian A., on August 29, 2010

As Volkswagen AG is tossing around the idea of appointing its chief product strategist Matthias Mueller to run Porsche, its shares have risen to their highest level in five weeks.

This Bloomberg News report cited two insider sources who asserted that the transfer of Mueller would be part of a bigger reshuffling in which current Porsche CEO Michael Macht becomes the VW group's production head.

A merger between Volkswagen and Porsche is expected to be completed next year. Currently, the two companies are discussing their future model strategy. In the medium term, Porsche will be expanding its offerings to hit its target of doubling deliveries to 150,000 vehicles.

Aleksej Wunrau, an analyst at ING BHF-Bank AG in Frankfurt, considers this a good move, adding that Macht is perceived to be capable of running a cost-efficient strategy for VW's luxury brands Audi, Porsche and Bentley. Porsche rose by up to 6.1% to 37.19 euros in Frankfurt on Monday, the highest level since May 19. The stock traded 5.1% higher at 36.84 euros as of 4:53 p.m.

These sources also said that Macht's decade-long experience in running production at Porsche is what convinced VW CEO Martin Winterkorn that he is a good choice to replace Jochem Heizmann.

But although Mueller is the no. 1 choice to succeed Macht as CEO of Porsche's carmaking operations, a final decision on the changes has yet to be made. Last week, holding company Porsche SE improved its full-year forecast after sales beat analysts' estimates with the success of the new Panamera sedan.

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