The Lamborghini purchase by VW's Audi unit, for an estimated 200 million marks ($110.7 million), does precious little in volume terms to Volkswagen's overall output, as the high-performance sports car maker produces only around 200 cars a year.

Europe's biggest car maker said it had signed a letter of intent to take over the Bologna-based Lamborghini and that it hoped to finalise details and close the sale in coming weeks.

Lamborghini sold around 200 cars last year, mainly its "Diablo" model, which costs around 350,000 marks and has an engine with over 500 horsepower.Acquiring Lamborghini adds another prestigious brand to VW's growing ranks of top-class marques. "Lamborghini's image will fit in with us very well," an Audi spokesman said.

Car analyst Ulrich Horstmann atMerck Finck agreed with the group's opinion that Lamborghini was a good fit.

"I am very pleased with this decision. After buying Rolls-Royce (Motor Cars), VW is well positioned in the luxury segment of the market. Lamborghini, with its sporty character, sits very well with Rolls-Royce's more conservative image," Horstmann said.

Other analysts were more sceptical, and felt that in overall group terms, the Lamborghini purchase did not make that much difference. Thomas Aney at Bayerische Hypotheken und Wechselbank said the purchase was not significant in terms of the parent and pointed to the small size of the company, which he described as a "trophy buy".

He said it was unlikely that the purchase of the Lamborg ical market. "Now the other brands, the competitors, are the ones who are forced to take up the challenge," Horstmann said, noting this leaves VW well positioned in a market where margins are higher than in any other segment of the auto market.

Another important factor is that competitorstrying to get into the top-end of the market are going to have to look harder and possibly pay more as the number of luxury marques available is becoming ever more limited.