Subject category:
Finance, Accounting and Control
Published by:
China Europe International Business School
Length: 13 pages
Data source: Published sources
Abstract
Porsche, the most profitable carmaker in the world, earned six times more in 2008 from managing financial derivatives than from selling cars. This case discusses Porsche''s car business as well as its financial management. Since the mid 1990s, Porsche has achieved a steady growth in the luxury sports car market and has also expanded successfully into the markets of sport utility vehicles and low-end luxury cars. Porsche has used currency derivatives to manage its large exposure to currency risks and has made considerable profits from currency derivatives. Since 2005, Porsche has been aggressively purchasing stocks of Volkswagen. In 2008, Porsche got a windfall from its management of Volkswagen stocks. This case features a debate about Porsche''s business model in association with its governance structure. The case can be used in courses of international finance and risk management.
About
Abstract
Porsche, the most profitable carmaker in the world, earned six times more in 2008 from managing financial derivatives than from selling cars. This case discusses Porsche''s car business as well as its financial management. Since the mid 1990s, Porsche has achieved a steady growth in the luxury sports car market and has also expanded successfully into the markets of sport utility vehicles and low-end luxury cars. Porsche has used currency derivatives to manage its large exposure to currency risks and has made considerable profits from currency derivatives. Since 2005, Porsche has been aggressively purchasing stocks of Volkswagen. In 2008, Porsche got a windfall from its management of Volkswagen stocks. This case features a debate about Porsche''s business model in association with its governance structure. The case can be used in courses of international finance and risk management.