Volkswagen AG is an automobile manufacturer based in Wolfsburg, Germany. It forms the core of Volkswagen Group, which is the world's fourth largest car producer after GM, Toyota and Ford, respectively.


The name means "people's car" in German, in which it is pronounced [folksvag?n]. Its tagline is "Volkswagen - Das Auto" (in English "Volkswagen - The Car"). Its previous German tagline was "Aus Liebe zum Automobil", which is translated as "Out of love for the car" - or, "For Love of the Automobile", as translated by VW in other languages.


The company has always had a close relationship with Porsche, with the first Porsche car, the Porsche 64 of 1938, using many components from the Volkswagen Beetle.


The two companies collaborated in 1969 to make the VW-Porsche 914 and 914-6 whereby the 914-6 had a 6-cylinder Porsche engine and the standard 914 had a 4-cylinder Volkswagen engine, and in 1976 with the Porsche 912E (USA only), and the Porsche 924, which used many Audi components and was built at an Audi Neckarsulm factory. Most 944s also were built there, although they used far fewer VW components.


The Porsche Cayenne, introduced in 2002, shares its entire chassis with VW Touareg, which is built at the Volkswagen factory in Bratislava. In late 2005, Porsche took an 18.65% stake in VW, further cementing their relationship and preventing a takeover of Volkswagen, which was rumored at the time. Speculated suitors included DaimlerChrysler, BMW, and Renault.


On March 26, 2007 Porsche took its holding of Volkswagen shares to 30.9%, triggering a takeover bid under German law. Porsche formally announced in a press statement that it did not intend to take over Volkswagen (it would set its offer price at the lowest possible legal value), but intended the move to avoid a competitor taking a large stake or to stop hedge funds dismantling VW, which is Porsche's most important partner[4]. Porsche's move comes after the European Union moved against a German law that protected VW from takeovers. Under the so-called "Volkswagen Law", any shareholder in VW cannot exercise more than 20% of the firm's voting rights, regardless of their level of stock holding. The European Court of Justice has already indicated that the law probably breaks EU rules, and a full judgement to that effect is expected later in 2007[5].


As of July 2007, Porsche has borrowed 10 billion euros ($13.6 billion), in an intention to buy Volkswagen, and doesn't seem to be letting up on its acquisition of VW. The Stuttgart car-maker has tapped into a network of 37 lenders for a $13.7 billion loan to finance its purchase of VW shares. The money will go to pay for outstanding Volkswagen shares, since VW shareholders only offered up less than one-percent of their shares when Porsche offered them below-market-value sale prices. Earlier this year it was reported that of Porsche's 1.14 billion euro ($1.55 billion) fiscal profit in the first fiscal half of 2007, more than one billion ($1.36 billion) of it came from VW. In which case it would make sense to many observers that Porsche would do whatever possible to keep the two siblings together.