BMW and Volkswagen Could Have Fight Over Carbon Fiber Producer Buyout

By Jacob Brown | October 17, 2011
BMW and Volkswagen have a history of spats with each other. Whether competing for sales superiority in hotly contested segments, or splitting the difference between Rolls-Royce and Bentley in the 1998 sale of the brands, it seems the companies can’t seem to ever get along. Now, it appears yet another middle school-like fight over territory between the two automakers may be coming to a head. This time, though, it looks like it will be over share of German carbon fiber producer SGL in which BMW looks to increase its control—unless Volkswagen steps in. An integral company in helping produce the upcoming BMW i3 electric hatchback, SGL will manufacture the bodies of the upcoming electric runabout—the first mass-produced car made of the lightweight material. Carbon fiber has recently become a go-to material for its light weight and high strength, despite its huge cost over conventional steel.
Volkswagen owns 8.2 percent of SGL, and may increase its share to allow it to block BMW’s chance to become the minority stake owner of the company. While Volkswagen has said in the past that it would not raise its stake in the company past 10 percent, a mere 7 percent more in stock value would diffuse BMW’s strength in the decision-making ability it would have over SGL. Currently, BMW shareholder Susanne Klatten owns 29 percent of SGL, and BMW itself owns a much smaller portion of the specialty materials company. Voith, a shareholder company closely aligned with Volkswagen, owns another 9.1 percent of the carbon fiber maker. While we imagine it would make the most sense if BMW and Volkswagen sat around the campfire holding hands, sang Kumbaya, and shared SGL, the two German automakers have rarely seen eye-to-eye on much of anything. As carbon fiber becomes a more popular commodity in the face of lighter cars coming to market and tighter fuel-economy regulations, SGL looks to be a hotly contested battleground in the future of automotive technology. In whose hands it ends up is anyone’s guess. Source: Automotive News (Subscription required)