Porsche 'Confident' EU Will Stop VW Law

Automaker says European Commission will likely overturn Germany’s plans to allow Volkswagen's second-biggest shareholder, the state of Lower Saxony, to block important decisions.

GENEVA (AP) -- Porsche's chief executive said Tuesday he is confident the European Commission will back his company in a dispute with the German government over the future of Volkswagen AG.

Wendelin Wiedeking said Brussels would likely overturn German government plans to allow Volkswagen's second-biggest shareholder, the state of Lower Saxony, to retain its right to block important decisions.

"I believe the EU Commission will throw the issue out, at least that's what we're hearing," Wiedeking told reporters on the sidelines of the Geneva auto show.

Porsche is already the majority shareholder in Volkswagen, Europe's largest carmaker, and has declared its intent to increase its stake to 75 percent this year.

The German government and Brussels differ over whether Germany can keep a legal provision that allows a shareholder with 20 percent of Volkswagen's stock to block major decisions.

Lower Saxony, where VW's Wolfsburg headquarters is located, holds just over 20 percent. Porsche argues that the threshold for a blocking minority should be 25 percent, in line with standard German securities laws.

"In the long term this issue will be off the table, one way or another," Wiedeking said. "Once someone owns more than 75 percent of a company, you can't pass a law against the owner."

Porsche, which is presenting its new 911 GT3 in Geneva, had a good start to the year despite the economic downturn that has hit global auto sales hard, he said. "We're not dissatisfied."

The company is looking to the Asian market to pick up sales lost elsewhere, he added.

To this end, the company decided to hold off launching its new Grand Turismo Panamera sedan until the Shanghai auto show next month.

Wiedeking said the move was meant as a "thank you" to Chinese buyers, who bought 8,000 of its luxury sports cars last year.

Porsche hopes to sell 20,000 Panamera a year, he added.

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