Europe’s largest carmaker Volkswagen’s CEO Martin Winterkorn will stay put till 2016 as he seeks to complete the merger with sports carmaker Porsche.
In October Winterkorn had warned that the proposed merger may be delayed by up three years because of litigations and tax dispute worth billion Euros.
The debt ridden sports carmaker Porsche had agreed to merge with Volkswagen after ending a bitter dispute in 2009. It was agreed that the proposed merger will be complete by 2011 adding a sports brand to Volkswagen’s portfolio.
The recent verdict by a US court dismissing a $2 billion claim against the Porsche has eased pressure on both the entities. However, lack of clarification from German authorities still remains a major obstacle for the proposed merger.
Mr. Winterkorn was appointed CEO in 2007 and was due to step down at the end of 2011. However, the supervisory board unanimously extended his term till 2016 at a board meeting held on Sunday.
The previous CEO – Bernd Pischetsrieder was asked to step down within one year of his extension and Mr. Winterkorn was brought in fro VW’s luxury car unit Audi.
“Volkswagen seeks continuity at the top of the company so we can concentrate completely on the details of our tasks”, said Bernd Osterloh – head of carmaker’s works council and Deputy Chief of Supervisory Board. “With Martin Winterkorn we’ll continue our successful course”, he added.
VW has been expanding its product portfolio under Mr. Winterkorn and has added Swedish truck-maker Scania to its portfolio. Negotiations are on for Fiat’s sports car brand Alfa Romeo.
VW has plans to invest €6 billion in China to increase its capacity to 2 million cars annually by 2018. It plans to invest a total of €50 billion by 2018 including a new plant in US in the current fiscal. The carmaker hopes to replace Toyota Motors as the biggest and the most profitable auto company by 2018.
The company is also in discussions with billionaire Oleg Deipaska’s Gaz motors in Russia to assemble 150,000 vehicles annually under the VW brand.