Lamborghini's SUV Fits Volkswagen's Multibrand Strategy

NEW YORK (TheStreet) -- Volkswagen's (VLKAY) Lamborghini brand is about to announce an agreement to build the new Urus SUV in Italy, underpinned by financial incentives from the Italian government of about 80 million euros ($87 million) and a commitment by the company to employ 500 workers for the project. 

One might wonder: Why would Lamborghini, known for sexy, low-slung sports cars like the Huracan and Aventador, embark on plan to produce a spiffed up ... station wagon?

Wolfsburg, Germany-based VW is already developing a platoon of mass-market SUVs and crossovers for North America and elsewhere, because demand for such vehicles is hot. So the automaker isn't about to let itself get caught without something in that class for ultra-high-end buyers. 

Lamborghini is the latest super-luxury brand to bow to the appetites of customers willing to spend six figures for what amounts to a leather-and-chrome-laden SUV -- or crossover, if you prefer -- powered by a high-performance engine. Those who argued that exotic makes such as Porsche and Maserati should stick solely to low-slung roadsters and sporty sedans have already lost the debate. 

VW's goal is to be the No. 1-selling global automaker, which will require it to accelerate past current champ Toyota. (TM). The 3,000 or so Lamborghini SUVs that VW hopes to sell each year once production starts in 2018 won't close the gap much: VW already sells in the neighborhood of 10 million passenger vehicles under eight brands. 

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