Volkswagen says it has indefinitely halted talks over its merger with Porsche, saying the sports car manufacturer is not prepared for a partnership. Porsche went into significant debt earlier this year acquiring a majority share in Volkswagen.
Volkswagen says that Porsche, which wants to align the two automakers together under one umbrella, lacked a sufficient strategy for the potential integration.
“We recognized at the end of the week that Porsche is lacking several fundamental conditions for the discussions”, a VW spokesman said on Sunday.
The automakers had planned to meet today to discuss the merger, but the meeting has been cancelled. Porsche says that the talks will continue, but Volkswagen says it is holding off.
The Porsche-VW tie-up is a family affair; Porsche’s supervisory board is mostly made up of Porsche family members and VW Chairman Ferdinand Piech is a grandson of Porsche founder, Ferdinand Porsche. Yet Piech says that Porsche, the automaker, must reduce its 9 billion euro debt before it seriously considers an integration with VW. Porsche incurred the debt when it scrambled to pick up a controlling share in VW late last year.
