FRANKFURT -- Volkswagen wants to expand its cooperation with Porsche but pledged to hold its single largest shareholder "at arm's length" to keep all options open.
Chief Executive Bernd Pischetsrieder told analysts on Tuesday that VW would remain independent from Porsche and would reserve the right to enter into partnerships with other carmakers such as DaimlerChrysler.
To assuage fears of potential conflicts of interest with Porsche on its supervisory board, the VW CEO said the carmaker planned to introduce a new subcommittee to ensure corporate governance standards would be enforced.
"All our shareholders can rest assured that we not only have an agreement which says that we are working at arm's length but that this is regularly monitored, on the one hand by an independent special audit but as well by an independent supervisory board committee," he said during a conference call.
The VW CEO said talks had been held in recent months with Porsche over extending existing technical agreements beyond an individual, model-by-model basis to include both complex automotive modules and smaller components.
"For Volkswagen, it is of great financial benefit because it makes existing product plans, particularly on this example of electronic platform, financially more viable," he said, although he declined to specify expected savings.
The governing agreement with Porsche, which has already secured 18.5 percent of VW's voting rights, did not mean VW was exclusively tied to the sports car maker and would not lead to the cancellation of projects that compete with Porsche, such as Audi's planned Le Mans quattro super sports car.
"Arm's length means nothing else than it has to be beneficial for both parties, and if it is not for us then we cannot do it," the Volkswagen CEO said.
Pischetsrieder cited ongoing cooperation talks with Chrysler on new projects that go beyond already announced discussions on possibly building a large VW van for the North American market.
Volkswagen finance chief Hans Dieter Poetsch dismissed concerns that the Porsche stake purchase, which essentially prevents a hostile takeover of VW, would reduce the pressure on VW to become more competitive.
"The environmental conditions which have proved so challenging to date are not going to ease because of a new major shareholder. We need to be competitive and there is no alternative," he told analysts.
Poetsch reaffirmed the group's mid-term goals of improving pretax earnings by 4 billion euros ($4.8 billion) to 5.1 billion euros by 2008 and generating free cash flow from its automotive operations.
Potential synergies from wider cooperation with Porsche, however, would not necessarily mean VW would raise its goals.
"I think we are developing on target, but it is much too early to say whether it is possible to establish an even more ambitious target," the finance chief said.
Pischetsrieder ruled out a cross shareholding, however, saying that no voting rights in Porsche were available and it made no sense to acquire non-voting preferred shares.
He declined to say what the group planned to do with its own treasury stake, amounting to 13 percent of voting rights.
Asked if a cancellation was on the cards now that VW had a second long-term large investor, the Volkswagen CEO told analysts: "I think you know my answer. It was always the same in the past and it hasn't changed: We wish to keep all options open."