VW's Audi and Porsche to join forces on vehicle development

FRANKFURT (Reuters) - Volkswagen Group's VOWG_p.DE Audi and Porsche brands will join forces on vehicle development, the two upmarket brands said on Wednesday, to help the world's largest carmaker save money in the wake of its costly emissions test cheating scandal.

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The pact comes as Volkswagen (VW) Chief Executive Matthias Mueller, who previously worked as Porsche’s CEO and Audi’s head of product management, finalizes a plan to step up development of autonomous cars, electric vehicles and digital services.

Porsche and Audi said the focus was on jointly developing shared vehicle platforms, modules and components, in a deal that follows a period of intense in-house competition for development resources.

Projects will be jointly headed by representatives from each brand. In the coming months, joint teams will prepare the specific areas of cooperation and define a roadmap to 2025, they said.

Porsche, taken over by VW 2012, has emerged as a strong rival engineering center to Audi. Porsche’s MSB platform, used for its four-seater Panamera model, has been adopted for VW group’s next generation Bentley Continental model even though Audi had developed a similar offering.

Since the group’s emissions test cheating on diesel engines was exposed in September 2015, Audi has lost two research and development chiefs and the head of its automotive electronics division, who did pioneering work in the area of autonomous driving and battery technology.

Audi remains the group’s center of excellence for sport-utility vehicles, a lucrative and growing market, where it supplies platforms to Porsche and other brands such as Bentley.

With self-driving vehicles likely to play a major future role in the industry, Audi also develops autonomous cars for the group.

But a separate internal race has begun to become an engineering hub for electric vehicles, a field which includes research and development of battery cells, battery packs and electric motors.

Porsche has developed the J1 electric cars platform, while Audi has also worked on its own electric car.

Porsche has also taken over production of eight-cylinder gasoline engines for large sportscars for the VW group, even though Audi has its own engine factory in Hungary.

Reporting by Edward Taylor; Editing by Mark Potter