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Does VW know something we don't?

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Does VW know something we don't?

Automotive News -- November 22, 2010 - 12:01 am ET

Volkswagen Group is still trying to accumulate enough brands to satisfy every buyer -- and then some.

Now VW is circling around Fiat with very strong intentions to buy Alfa Romeo or Ferrari or both. That would put the number of brands that VW owns or controls at more than a dozen.

As other manufacturers are reducing the number of brands and models they sell, VW Group is going in the opposite direction.

Does VW know something that the rest of us don't? Or is it ignoring the facts of life that sooner or later will come back to haunt it?

In Detroit, General Motors, which is now recovering, went bankrupt with too many brands. While restructuring, GM shed Saab, Hummer, Pontiac and Saturn. With the exception of Pontiac, those brands required billions of dollars of investment from the old GM, which could sell only one of the brands -- and for relative peanuts.

Chrysler, which has added a brand with Ram truck, over the years shed Plymouth and DeSoto. What happens when Fiat and Lancia models are added to the U.S. portfolio remains to be seen.

Ford Motor Co., which wants to concentrate on its core Ford brand, will shed Mercury by the end of the year.

Meanwhile, VW Group has the low end of the market covered with Skoda, Seat and Volkswagen and the high end covered with Bentley, Lamborghini and Bugatti, and it seems intent on adding makes to its portfolio as rapidly as possible.

In China, companies are just beginning to consolidate, but I have no doubt that dozens of companies will be eliminated or combined in the next decade. China has too many companies and too many brands.

It has never been wise to bet against VW Group or Ferdinand Piech. But this time you have to wonder what the plan might be.

Or maybe GM missed a great opportunity to sell Pontiac to VW Group last year.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101122/OEM01/311229990/-1#ixzz162uo0pqr

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