July 17, 2014 at 5:49 pm

VW says acquisitions not on agenda as Fiat denies talks report

Volkswagen AG said takeovers aren’t on the agenda at the moment after both Fiat SpA and its biggest investor denied a magazine report that Europe’s largest carmaker made an approach to buy all or part of the Italian competitor.

“We’re concentrating now on reaping efficiencies within the group,” a VW official said, declining to comment further on the article published earlier Thursday by Manager Magazin.

VW Chairman Ferdinand Piech, a member of the family that controls the Wolfsburg, Germany-based carmaker, has held various talks with associates and members of the Agnelli family about a takeover of Fiat, the Hamburg-based magazine reported on its website.

“Fiat states that they have not held discussions with Volkswagen regarding a potential merger,” the Turin-based manufacturer said Thursday in a statement.

A spokesman for Exor SpA, the Agnelli family investment vehicle that owns 30 percent of Fiat’s stock, also said no talks have taken place.

Volkswagen Chief Executive Martin Winterkorn is focusing on profitability as the company closes in on its goal of overtaking Toyota Motor Corp. as the world’s largest carmaker.

The German manufacturer targets selling more than 10 million vehicles annually for the first time this year and is starting a program to cut costs and increase efficiency at its namesake brand by 2017.

After securing full control of Swedish truckmaker Scania AB in May, Volkswagen said it didn’t plan any large acquisitions in the near future as it focuses on integrating commercial-vehicle operations, which also include Munich-based MAN SE.

“Volkswagen has an urge to become the No. 1 global automaker, and an acquisition of that size would bring them to their target immediately,” said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt. “But real interest in Fiat as a whole is rather unrealistic and would entail many problems,” including Fiat’s struggles in Europe and potential antitrust issues in South America.

According to Manager Magazin, the Agnelli family would focus on Fiat’s Ferrari sports-car unit and withdraw almost completely from the remaining auto business, while Fiat’s Chrysler division could help VW’s efforts to grow in the U.S.

There are a number of obstacles to any deal, including finances and divergent strategies pursued by Fiat and Volkswagen, the magazine said. Fiat is in the midst of completing its merger with Auburn Hills-based Chrysler that would involve a listing on the New York Stock Exchange.

“I wouldn’t give it a very high probability of happening,” said Joe Phillipi, analyst and president of Autotrends Counsulting. “Just because of where VW and Fiat are.”

Karl Brauer, senior analyst for California-based Kelley Blue Book, said such a move would make sense.

“The world has become so global in the last 10 years that every manufacturer is now aware to compete on the global stage you need scale and you need reach,” Brauer. “Volkswagen is trying very hard right now to achieve global scale.”

Brauer said FCA could benefit from VW’s success in markets like China, and that a merger would put VW well ahead of GM and Toyota in terms of global sales.

“It would be a shockwave,” he said.

Piech and Fiat Chief Executive Officer Sergio Marchionne have sparred publicly in the past. The Fiat executive invited Volkswagen to a dawn showdown at the Paris auto show in 2012 after being irritated by comments from the German company’s executive.

Piech has often expressed his interest in Fiat’s Alfa Romeo brand, which Marchionne has vowed to keep.

News reporter Michael Martinez contributed.