Porsche managing to look very smart – and rather brutish all in one week.
First, the luxury German carmaker threatened to launch a legal challenge to prevent its customers from paying an increased level of congestion charge in London. David Murphy is not impressed:
The congestion charge has been a huge success. Global warming is a major political issue which is not going away. If there is one thing Porsche could do to appear regressive and the choice of the selfish bore, suing Ken could well top the list. It looks to me like a PR gaffe equivalent to Ratner’s ‘total crap’.
Mayor Ken Livingstone is planning to a £25-a-day charge for the most polluting cars entering the UK capital, affecting among others the Porsche Cayenne 4×4, and the 911. But Porsche has been trying to build its green credentials – with models like the Cayenne hybrid. And its claim that wealthy, successful people will hesitate to base themselves in London as a result of the charge just looks a bit silly.
Fortunately, Porsche is better at managing its image in other areas – like investing. The carmaker-come-hedge fund last year made three time as much money from trading share options as it did from building automobiles.
Now Porsche has drawn down a €10bn credit line in full to plough into low-risk investments, because the cost of the facility, originally granted to fund a takeover approach for VW, is now less than the returns available elsewhere.
Let’s hope Porsche stays smart and that its ‘low risk’ investing strategy stays that way. Much of that considered low risk a year ago looks decidedly dicey today. But the fact that this opportunity exists, and that the banks were doling out credit lines at such slim interest (20bp over the euro interbank offered rate), tells you a lot about the mess in which we currently find ourselves.