VW concerns hurt Porsche sales

Porsche SE, maker of the 911 sports car, dropped to the lowest level in 18 months on investor concerns that it may pay too much to buy more Volkswagen AG shares, just as record oil prices squeeze demand for cars.

Porsche fell as much as 7.09 euros, or 7.2 percent, to 90.80 euros in German trading, its biggest drop since Jan. 4 and the lowest level since Dec. 12, 2006. Porsche shares were down 6.5 percent at 1:40 p.m. in Frankfurt, valuing the Stuttgart, Germany-based maker of the 911 sports car at 15.9 billion euros ($25.1 billion).

Investors are asking “how, when, and for what price'' Porsche will buy more shares of Volkswagen, said Marc-Rene Tonn, a Hamburg-based analyst with M.M. Warburg. Porsche's planned increase of its holding in the Wolfsburg, Germany-based automaker comes amid “increasing angst'' about the impact of soaring oil prices on demand for cars and with Volkswagen shares “relatively strong,'' he said.

Volkswagen shares have risen 15 percent this year, while other automakers have fallen. Fiat SpA has dropped 44 percent, PSA Peugeot Citroen is down 37 percent, and Porsche has fallen 33 percent.

Porsche plans to increase its 31 percent stake in VW, Europe's largest carmaker, to more than 50 percent after it receives regulatory clearance. The price of oil reached $143.67 a barrel yesterday.

Volkswagen fell as much as 3.77 euros, or 2.1 percent, to 179.51 euros in Germany trading. Bloomberg.com