(Bloomberg) — The billionaire family controlling Porsche AG and Volkswagen AG is eyeing a major investment in the defense industry as its automakers struggle with rising trade tensions and muted demand.
Porsche Automobil Holding SE, the listed holding company of the Porsche-Piëch clan, is considering a third long-term anchor investment in industries that overlap with the mobility and industrial technology sectors, it said Wednesday.
“We are also looking at defense, we are also looking at infrastructure,” finance chief Johannes Lattwein said during a call discussing Porsche SE’s earnings.
The family is mulling the move as Volkswagen and Porsche contend with falling sales in China and the threat of tariffs in the US. The holding company on Wednesday cut its dividend after reporting a net loss of €20 billion ($21.6 billion) due to non-cash impairments related to its VW and Porsche holdings. The troubles heap more pressure on Oliver Blume, who runs both automakers.
Tapping into new industries may prove lucrative as Germany prepares to unlock hundreds of billions of euros in defense and infrastructure expenditures. The measures, which passed their final legislative hurdle last week, signal a new period of spending designed to boost Europe’s biggest economy and modernize creaking infrastructure.
Porsche SE has denied a Bild report saying the family was considering reducing its 53% stake in Volkswagen. Any decision would require consensus within the clan, which counts several dozen descendants of whom few play an active role in the automotive business.
“I can say point blank that there are no thoughts whatsoever of divesting from our core holdings,” Chairman Hans Dieter Pötsch said Wednesday.
Porsche SE has €2 billion ($2.16 billion) in liquidity and doesn’t intend to take on additional debt for another investment, it said Wednesday. Lutz Meschke, who until recently served as CFO for the Porsche carmaker, sits on the holding company’s management board and is overseeing the expansion of its non-core portfolio.
(Updates with details on German defense spending in fourth paragraph.)
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