Love Fest Over?

Volkswagen AG's plan to develop a cross/utility vehicle for its luxury Audi marque is causing consternation at development partner Porsche AG.

Porsche contends that for VW to bring a Touareg/Porsche Cayenne-derived Audi CUV to market, it must pay a licensing fee to Porsche for the engineering.

VW executives are denouncing Porsche's stance, saying the joint contract covering co-development of the Touareg/Cayenne does not require a fee if the platform is re-engineered by VW to accommodate a vehicle for a different nameplate.

Audi AG showed its CUV hand when it unveiled the Pikes Peak concept at the Detroit auto show in January. The Pikes Peak is loosely based on an extended-wheelbase version of the Cayenne/Touareg platform and uses a number of components found in the two CUVs. The Pikes Peak carries a platform designation of PL75, while the Cayenne/Touareg was drawn from the Colorado platform.

“If Audi does go that route and decides to develop the Pikes Peak…that shared platform is done through a licensing agreement with Porsche, so they would then have to license that platform from us,” Gary Fong, product publicity specialist for Cayenne at Porsche Cars North America Inc., tells Ward's.

Porsche contends that as a partner on the Colorado program, it would be owed residuals if another vehicle were developed directly off the existing platform.

“That is absolute nonsense,” Erwin Pape, member of Volkswagen AG's management board and executive vice president-product development for commercial vehicles, tells Ward's. “Porsche has not developed that (the PL75) platform, and they do not have license for that platform.”

Matthais Kroll, project manager-off-road vehicles at Volkswagen, explains the VW/Porsche relationship: “There is a license with Porsche in terms of using this same platform with the same dimensions, without any change…and just badge another brand of the VW group on it. In that case, we have to pay Porsche to license it.”

Developing a longer-wheelbase version of the platform for another vehicle with different dimensions and new technologies nullifies Porsche's licensing rights, Pape contends.

Additionally, the contract does not restrict use of the CUV's components by either of the companies.

“PL75 (the Audi Pikes Peak platform) is not the Colorado (platform). There is no payback to Porsche on that,” Pape insists.

The perceived rift may be coming to light because VW did not give Porsche a heads-up on the Pikes Peak development plans, sources say. Porsche executives were not informed of VW's intentions until weeks — or possibly days — before the Audi CUV concept was shown to the public.