Volkswagen wants to acquire insolvent contract assembler and carmaker Karmann first and foremost because of its technical expertise, the Financial Times Deutschland reported, citing VW company sources.

The newspaper said VW is not interested in Karmann's manufacturing operations because production at the Osnabrueck plant is more expensive than at Wolfsburg.

Sources said that what is really valuable to the German carmaker is Karmann's toolmaking technology and engineers.

Analysts have said that VW wants to rescue Karmann for tactical reasons and to return a favour to its major shareholder, the state of Lower Saxony, for its help in the power struggle with Porsche. State government sources, however, denied this.

Earlier this year Lower Saxony's premier, Christian Wulff, advocated the preservation of the VW law, which hampered the planned takeover by Porsche.

VW has apparently been in talks over a collaboration with Karmann for more than a year. The insolvency of the company has now made it attractive for a takeover.