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If VW defaults on loans it may sell Bentley or Lamborghini

If something goes catastrophically wrong with Volkswagen Group's recent $21 billion loan, brands like Bentley or Lamborghini could hit the auction block. According to two insiders to Reuters, the beleaguered German automaker agrees with its creditors to sell assets if the company somehow can't pay back the debt in a year. One of these anonymous people claimed the company hasn't yet deliberated over what to sell. However, the sources were willing to speculate that the power engineering portion of Man could be among the first to go. "Volkswagen may also consider divesting luxury car brands Bentley and Lamborghini or motor bike brand Ducati, although these units don't really move the needle," an insider said to Reuters. VW Group negotiated with the banks earlier this week to get the massive loan. The cash is necessary as a buffer in case the automaker doesn't have enough money on hand to repair vehicles or settle upcoming fines. VW would reportedly issue bonds in the spring to begin paying the debt. The company's bills will start racking up quickly in the new year. German authorities mandate a recall there in early 2016, and repair campaigns in the US for the 2.0- and 3.0-liter diesel engines are inevitable. There are also hundreds of class-action lawsuits to settle. The company needs to resolve its CO2 emissions scandal in Europe, too. In response to these financial threats, VW management created a cost-cutting plan to slash the research and development budget by $1.1 billion next year.

Audi CEO's Dieselgate arrest threatens fragile truce among VW stakeholders

FRANKFURT — The arrest and detention of Audi's chief executive forces Volkswagen Group's competing stakeholders to renegotiate the delicate balance of power that has helped keep Audi CEO Rupert Stadler in office. Volkswagen's directors are discussing how to run Audi, its most profitable division, following the arrest of the brand's long-time boss on Monday as part of Germany's investigations into the carmaker's emissions cheating scandal. The supervisory board of Audi, meanwhile, has suspended Stadler and appointed Dutchman Bram Schot as an interim replacement, a source familiar with the matter said on Tuesday. Schot joined the Volkswagen Group in 2011 after having worked as president and CEO of Mercedes-Benz Italia. He has been Audi's board member for sales and marketing since last September. The discussions risk reigniting tensions among VW's controlling Piech and Porsche families, its powerful labor representatives and its home region of Lower Saxony. VW has insisted the development of illegal software, also known as "defeat devices," installed in millions of cars was the work of low-level employees, and that no management board members were involved. U.S. prosecutors have challenged this by indicting VW's former chief executive Martin Winterkorn. Stadler's arrest raises further questions. Audi and VW said on Monday that Stadler was presumed innocent unless proved otherwise. Munich prosecutors detained Stadler to prevent him from obstructing a probe into Audi's emissions cheating, they said on Monday. Stadler is being investigated for suspected fraud and false advertising. Here are the main factors deciding the fate of Audi. Background: Audi's role in Dieselgate Volkswagen Group was plunged into crisis in 2015 after U.S. regulators found Europe's biggest carmaker had equipped cars with software to cheat emissions tests on diesel engines. The technique of using software to detect a pollution test procedure, and to increase the effectiveness of emissions filters to mask pollution levels only during tests, was first developed at Audi. "In designing the defeat device, VW engineers borrowed the original concept of the dual-mode, emissions cycle-beating software from Audi," VW said in its plea agreement with U.S. authorities in January 2017, in which the company agreed to pay a $4.3 billion fine to reach a settlement with U.S. regulators.

Bentley re-creates one-of-a-kind sports sedan destroyed in 1939

Bentley's Mulliner division specializes in making one-off (or few-off) projects for clients willing to foot the bill. They're the folks you'd want to talk to if you want a long-wheelbase Flying Spur, a Bentayga-based dually pickup, or anything in between. The division only works on new models, but it stepped outside of its comfort zone to re-create a one-of-a-kind Bentley manufactured and destroyed in 1939. The project is part of Bentley's on-going centennial celebration, and finishing it in time was easier said than done. It made building a concept car like the EXP 100 GT look like assembling a Lego kit. The original Corniche disappeared after getting bombed by the German army, and a majority of the people who saw it in person are dead, so the men and women tasked with resurrecting it only had a handful of period, black-and-white photographs and technical drawings to work with. The final product looks stunning, and Bentley claims it's identical to the original in every way. Parts like the chromed headlight bezels, the droplet-shaped fenders, and the wooden dashboard were exclusive to the Corniche, so they had to be manufactured from scratch using the correct materials, and the right production techniques. The British firm could have saved itself the trouble of re-creating this unique part of its history if another car hadn't pulled out in front of it 80 years ago. Bentley made the original Corniche during tumultuous times as it explored the possibility of releasing a more powerful variant of the Mark V scheduled to make its debut in October 1939. It asked French designer Georges Paulin to draw a futuristic, streamlined body, and it commissioned Paris-based coachbuilder Carrosserie Vanvooren to build it using thinner-than-normal steel to save weight. The Corniche lapped the Brooklands track for the first time in May 1939 and quickly reached over 100 mph, an impressive speed at the time. Testing continued in rural France, where the big Bentley blended in as well as a flying saucer. In August 1939, one of the company's test drivers swerved to avoid another car, rolled, and wrapped the aerodynamic front end around an unsuspecting tree. Bentley separated the body and the chassis. It immediately shipped the chassis to its headquarters in Crewe, England, and curiously asked a local shop to repair the body instead of sending it back to Vanvooren in Paris.