Race-track rivalry moves to boardroom as VW brands battle for electric car jobs

Sun Nov 27, 2016 6:38am EST
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By Edward Taylor and Jan Schwartz

FRANKFURT/HAMBURG (Reuters) - Just as Porsche and Audi have fought for supremacy on the race track, the Volkswagen brands are now locked in a cut-throat battle to develop and manufacture the next generation of electric cars at a group embroiled in the "Dieselgate" scandal.

Volkswagen Group denies that the kind of internal rivalry that it encouraged at the Le Mans 24 hour race is getting out of hand in the boardroom.

But senior executives told Reuters that in-house conflict, particularly between VW and its premium brands, is intensifying over which factories will develop next generation cars while the German group has to cut costs elsewhere to pay for cleaning up its emissions cheating scandal.

"There is a cut-throat battle for resources. Every brand with engine-manufacturing capacity now wants a leadership role when it comes to electric motors, battery packs and battery-cell expertise," an executive at one of the VW divisions, who declined to be named, said.

Since returning to top-line racing three years ago, Porsche has beaten Audi to the world championship for sportscars and at Le Mans for the past two seasons.

Porsche will again seek to defend the titles in 2017 with its ultra-sophisticated petrol hybrids. But Audi, whose hybrid racers showcased the group's troubled diesel technology, has pulled out after winning the French race 13 times.

In the broader competition, Porsche also appears in the ascendant as Audi - which since the 1990s has achieved rapid sales growth to rival Mercedes-Benz and BMW - now struggles with the Dieselgate fallout and a series of negative press leaks.

Jobs are at stake as the group - whose brands also include Skoda, SEAT, Bugatti, Bentley and Lamborghini - moves to new technology and faces up to Dieselgate penalties and lawsuits which analysts say could cost as much as 30 billion euros ($32 billion).   Continued...

Nick Tandy of Britain drives his Porsche 919 Hybrid number 19 ahead the Audi R18 e-tron quattro number 7 driven by Marcel Fassler of Switzerland, during the Le Mans 24 Hours sportscar race in Le Mans, central France June 14, 2015. REUTERS/Regis Duvignau/File Photo