June 13, 2014 / 2:27 PM / in 4 years

Porsche takes on Audi at Le Mans, intensifying VW sibling rivalry

* Porsche returns to Le Mans racing after 16 years

* Audi has won Le Mans 12 times since 2000

* Audi-Porsche duel may cost VW 50 mln euros - source

* Puts VW’s fondness for internal competition to the test

By Andreas Cremer

BERLIN, June 13 (Reuters) - Porsche will return to the Le Mans sports car race for the first time in 16 years on Saturday, intensifying its rivalry with Volkswagen stablemate Audi and putting the parent company’s fondness for internal competition to the test.

Volkswagen (VW), Europe’s biggest carmaker with vehicles ranging from trucks and cheap Skodas to high-end sports cars, is widely viewed by industry analysts as the model for how to manage a variety of brands within a single group.

But with Audi striving to maintain its challenge to world No. 1 luxury carmaker BMW, some are questioning whether now is the right time to instigate a new battle with its sports car sibling.

Putting two teams into the 24-hour Le Mans race on June 14-15, one of the greatest tests of endurance for cars and drivers, could cost VW as much as 50 million euros ($68 million), a company source told Reuters, asking not to be identified because the matter is confidential.

What’s more, it risks exacerbating tensions that are already rising between the brands.

Audi’s TT sports coupe, for example, competes with Porsche’s Cayman model, while Porsche’s all-new Macan SUV has been cannibalizing sales from Audi’s equivalent Q5 model since hitting dealerships in April, according to research firm IHS Automotive.

“Audi and Porsche are already in head-on competition” in some vehicle segments, said Stefan Bratzel, head of the Center of Automotive Management think-tank near Cologne. “One mustn’t push this internal competition too far.”

The stakes are high. Audi, which won in Le Mans last year, and Porsche together contributed over two thirds of VW’s first-quarter group profit of 2.9 billion euros ($4 billion).

They are also cooperating closely on the production of sport utility vehicles (SUV) under VW’s cost-cutting strategy of producing more vehicles from common platforms.

With 16 wins, mainly during the 1970-1980s, Porsche is the record champion in Le Mans, ahead of Audi, Ferrari, Jaguar and VW’s Bentley.

It quit motor racing in 1998 after painful restructuring and expansion into SUVs which saved the brand from bankruptcy, transforming it into the carmaker with the highest profit margins in the industry.

But the maker of the iconic 911 model is keen to restore its racing credentials in a bid to maintain its attraction to sports car purists, even as SUVs account for more than half of sales.

“Racing is part of our brand and our DNA,” Porsche chief executive Matthias Mueller said last week. “It’s not enough to always talk about the successes of the past.”

Le Mans has also been a source of prestige for Audi, however. It has enjoyed twelve victories since 2000, and could do without being upstaged by its VW stablemate.

After a successful run of launches, Audi has few new models coming in stream opposite Mercedes’s string of new cars and BMW’s “i” series of electric cars, leading some analysts to predict the brand could soon lose momentum in the race with its arch rivals.

At Le Mans, Audi and Porsche will be vying for the top prize with hybrid models as new rules restrict the amount of fuel the cars will use, and Audi appears to be braced for the possibility that Porsche will deny it a fifth straight win.

“If a newcomer scores victory at the first push, this would be even greater motivation for those who haven’t won,” Wolfgang Ullrich, head of motorsports at Audi told Reuters.

“We know that Porsche will be a tough competitor.”

$1 = 0.7345 Euros Editing by Mark Potter

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