Will Porsche do themselves in?

[limoncello]

Porsche has done OK lately, I think their CEO was named Automobile mags man of the year for taking a Porsche, that was in the red, and turning it into one of the most profitable makers around. Somebody did something really right by bringing in the Boxster/Carrera co-design, the Cayenne, etc. It HAS worked.
The future? Four door sedans? I'm not so sure. They are seemingly adding a lot to the mix at one time. Hope it works -

[jamscal]

Don't forget also that the 'new' Sedan will feature Cayenne mechanicals.

Exclusivity?

I'm used to seeing 50 C5 vettes before I see another Boxster, and then yesterday I pass two Boxster S s and then a regular one on my way to work. Kinda neat.

-James
'01 S

[MNBoxster]

Originally Posted by limoncello

Porsche has done OK lately, I think their CEO was named Automobile mags man of the year for taking a Porsche, that was in the red, and turning it into one of the most profitable makers around. Somebody did something really right by bringing in the Boxster/Carrera co-design, the Cayenne, etc. It HAS worked.
The future? Four door sedans? I'm not so sure. They are seemingly adding a lot to the mix at one time. Hope it works -

Hi,

All good points! One thing which has not been mentioned is the impact the Cayenne has had. It has contributed much more to Porsche's Sales Numbers and Profitability than the Boxster has, which has shown some declining sales of late.

This means that Porsche has gained momentum from exactly what I am saying, New Markets. The Cayenne created a whole new segment of Porsche Customers who would most likely have become Owners of MB, Lexus and Accura had they not had a Porsche to choose from - they were not likely to buy a Boxster or 911 instead.

The Cayenne is almost solely responsible for Porsche's turnaround, this very fact is even cited in one of their recent Annual Reports.

In other words, Porsche became Profitable by designing and producing something other than a Sports Car. I suspect that this lit more than a few Lightbulbs in the Minds of Porsche's Directors.

I'm not saying that Porsche will ever turn it's back to the Sports Car Market, just that there is a strong incentive to move in other directions as well, and at the same time...

Happy Motoring!... Jim'99

[Perfectlap]

THe funny thing is that by building so many Cayennes they have killed two birds with one stone: they've majorly increased revenues(40% of sales that were non-existent pre-Cayenne) which makes the 911 more 'exclusive' or uncommmon relative to their overall production.
Where as in the past the 911 was the car they sold the most of, its now fewer in numbers than the 1-2 punch of the Cayenne and Boxsters.

Kind of brilliant when you think about it.


But I think that they may want to take a hard look at being so reliant on the Cayenne. Nearly half of all sales on SUV's is not a plan for the future. The $3 a gallon future is going to affect this segment of the auto industry, whether that will be a concern at all for someone spending such a large sum on an SUV of all things, is a seperate matter.
Building HIGH end/low volume Sedans like Merc is a better strategy than going after the low cost/high volume "sporster" route. A better way of bringing more revenue while preserving the prestiege of the "there is no substitute" brand image. Porsche can really capitalize on the 'perceived' advantage that a Porsche will always out-handle, out-corner, out-brake any car made by BMW or Merc. A Porsche sedan will make a Merc or BMW sedan seem old school by comparison.
KInda like lining up a Maserati Quatroporte next to an S class. I know which I would rather take for a day trip with 3 passengers.

[BoxsterSbob]

Hi, it seems like the bottom line is Porsche wants to sell more units. They all want to sell more units! I want to sell more units and I don't make cars! This isn't a bad thing as long as the quality and feel that Porsche markets stays within the tolerances of the folks that consume them. Some might argue that quality has been a bit iffy at times (RMS). But, they're moving more metal than ever.

History suggests that if they misfire a few times on products it won't be the end of the (Porsche) world.

There is a chance that VW involvement might give P-management the expansion and reach they appear to be "jonesing" for. Or, this could all be defensive and aimed at avoiding a take-over by a larger firm/competitor?

Whatever the case maybe, I'm sure that the P-management team has gotten very accustomed to that high valuation, and the bonus that it generates. They'll do what they need to do to preserve it.

I, and I'm sure all of us, wish them continued success.



04S
bob

[MNBoxster]

Originally Posted by Perfectlap

THe funny thing is that by building so many Cayennes they have killed two birds with one stone: they've majorly increased revenues(40% of sales that were non-existent pre-Cayenne) which makes the 911 more 'exclusive' or uncommmon relative to their overall production.
Where as in the past the 911 was the car they sold the most of, its now fewer in numbers than the 1-2 punch of the Cayenne and Boxsters.

Kind of brilliant when you think about it.

Hi,

On one hand, this threads begins on a cautionary note about Porsche expanding their product line as a potentially Bad Thing and now it shifts to praising Porsche for doing so.

As you infer, a 40% increase to Sales is a Good Thing. But, I'm not sure I follow the Logic which says building 100,000+ SUVs somehow makes a Sibling GT Car more exclusive.

Porsche has never limited production of the 911 or the Boxster. Pretty much anyone who can afford and desires one can get it.

You may be confusing Market Demand with Exclusivity. If Demand increases for these Cars, as a Mass Producer, Porsche will meet this demand, albeit by increasing their own production capacity, or subcontracting production to others, which they have a history of doing. Any percieved exclusivity stems mainly from the limited number of potential Owners who both desire, and can afford them.

Marques such as Pagani, Ferrari (esp. the Enzo, FXX and F430), Aston Martin, Bentley, or Maybach are Exclusive. These Companies have decided to produce only set number of a certain model making them truly exclusive. Porsche is a Mass Producer. Referring to them as a Boutique Carmaker leads to confusion.

While there is no hard definition of what a Boutique Carmaker actually is, it is generally considered to be one which makes 100-4000 Units annually. Also, Parts-Sharing (using other's Engines, Transmissions, Suspensions, Brakes, etc.) and Hand Production are attributes often associated with these kind of small manufacturers. One of the Dictionary definitions of Boutique is: a small company that offers highly specialized services . These are not definitions which closely match Porsche at all.

Throwing this term about so loosely alleviates some of the responsibility Porsche should shoulder as a Major Manufacturer, such as addressing the various serious quality concerns raised with several late models. We as Customers should not be so quick to let them off the hook, especially in light of their Industry leading Profits.

I came across an interesting article from the Aussie Car Magazine Wheels about BMW, in it they state:"... Here's the problem: BMW is a boutique automaker -- meaning it produces and sells fewer than 800,000 cars a year. And though the company clears a healthy 9.1 percent profit on those cars -- and 675,076 sold last year -- truth is, it can't do that forever and grow in an increasingly competitive global auto industry..." Now, I doubt anyone here considers BMW to be anywhere near a Boutique Automaker. For the same reasons neither is Porsche...

Happy Motoring!... Jim'99

[Perfectlap]

I agree for the most part and that 'boutique' is a crutch that some companies like Porsche can pull out to blame the fact that they can't make a state of the art stereo for their car! But truth be told in comparision to other mass producers of cars they do their sales thing very much like a boutique automaker. I can walk into any dealership that sells BMWs and go home with an 06 BMW once the dealer's 06 stock is in? No need to ever deal with any special ordering for my particular BMW like Porsche does.

and i'm not sure you can really compare 30,000 north American cars that Porsche makes with what 300,000 North American cars BMW builds? Now add in the Mercs, S2000's, and other sportscars that Porsche customers consider before buying a P-car then you see that Porsche is in a very unique position for a company still producing mass producer reliability.
Perhaps Porsche is not a true boutique manufacturer but relative to its competitors (who are profitable!) their numbers are teeny tiny.
As I stated previously trying to triple their production numbers can have some negative consequences even if it helps them to build up the bottom line.
They should take a good look at what Merc and BMW have been unable to do with low cost cars. The BMW ti comes to mind.

[gRed04]

Originally Posted by MNBoxster

I'm not even sure that this is a Bad Thing, except for those who want to remain Exclusive. Frankly, I don't comprehend this, I don't feel the least bit exclusive owning a Porsche. It's a very nice Car, but after all, it is just a Car.

I think people purchase things out of necessity and out of desire. Desire plays a part even in necessity purchases but is maybe not as much a factor as function. Wanting to have something “special” is almost ingrained into American society. No one buys a Porsche out of necessity.

While you may not have chosen to own a Porsche for exclusivity you are part of a exclusive group of Porsche owners simply due to the fact of the number of this type of vehicle on the American highways and the price you must pay to be part of that group. Understanding that the expense of acquiring this type of vehicle is entirely relative.

I’m sure there are Pcar owners that buy the vehicle strictly because of the “cost” status symbol it represents, while others may be in the “performance” status camp. However, I would think we all categorically fall into one or the other ( or possibly both ).

[longislander1]

I think Porsche is diluting its cars to increase sales in the mass market as the (lower-priced) competition creeps closer and closer in performance. Cars in general are getting so good -- and so fast -- that the day will come soon where you won't have to pay Porsche prices to get Porsche performance.

[MNBoxster]

Originally Posted by longislander1

I think Porsche is diluting its cars to increase sales in the mass market as the (lower-priced) competition creeps closer and closer in performance. Cars in general are getting so good -- and so fast -- that the day will come soon where you won't have to pay Porsche prices to get Porsche performance.

Hi,

Excellent Point !! Increasingly, there is less Exclusivity with respect to Performance. This is Not something Porsche can choose to ignore...

Happy Motoring!... Jim'99

[BoxsterSbob]

That maybe true. But, it their job to make sure that Porsche sports cars meet customers expectations. To-date they have. I believe they'll continue to do so. You may have to work your way past sedans, stationwagons and minivans in the show room to get to them-but they'll be there. And, they'll be great, and expensive as always.

04S
bob

[Perfectlap]

Originally Posted by longislander1

I think Porsche is diluting its cars to increase sales in the mass market as the (lower-priced) competition creeps closer and closer in performance. Cars in general are getting so good -- and so fast -- that the day will come soon where you won't have to pay Porsche prices to get Porsche performance.

I think we are there already. The s2000 is much cheaper than the Boxster and the performance difference doesn't reflect the big difference in price.
Allot of guys I know who don't care what brand makes the car thought it was a no brainer and opted for the nimble S2000 without hesitation.

If you can already get Boxster performance at a much lower cost then obviously there are other facotrs driving demmand. And I agree, further 'diluting' the cars will backfire. The 2.7 is as small an engine as they should ever go, perhaps coupling that with a Lotus Elise type-bare bones ultra light weight targa top Porsche could be a good move. But a low cost version of the boxster with even less power would be a not good move in my opinion. Porsche has tremendous credibility from their LeMans achievements, they really need to be careful about that reputation for racing that they have established over 50 years.

[Ronzi]

Remember the Speedster?
It was created because the US Porsche importer (Max Hoffman, I believe it was) demanded an under $3,000 Porsche. Porsche shuffled from foot to foot and finally produced the Speedy in 1955, initially priced at $2,995, and in the process created an icon. It's an icon today anyway, although much less of one when it was in production. Even an $3k, it was DOUBLE what you would pay for a similar (engine size) MGA.
In the long run, if the customer base demands it, Porsche will build it.
The only thing is by the time the marketing gurus, the bean counters, and the 911 protectionists get done with it, it will probably be more like the 911 Speedster of 1990 (?), and ultimately an overpriced, underwhelming failure.

[ranbar2]

Interesting discussion about "exclusivity". Let me move away from semantics and throw in my two cents worth.

To me, exclusive means the number that you see on the road vis a vis other brands. Sure the S2000 is good car (no matter what you think about the low-end torque), but on my way into work I easily see a dozen of them every day. Z3/4's? Same thing. Mercs? It seems like every other car has the MB badge on the hood or grill. These cars have, to various degrees, become "commonized".

But when it comes to Porsches, here in Tampa I can use my fingers to count the ones I see in a week. If I limit it to 911's, then a month. And when I see one, even though I own one, my head still turns. And, to me, driving something other than what everyone and their brother (and aunt, uncle and cousins) is driving is part of the value of owning a P car.

And it has nothing to do with the cost of the car. In the lot where I work we have Mercs, BMW's, Jags, Lexus' galore - most of which cost close to or more than my boxster. (Hell, there are alot of pick-up's and SUV's that cost more than my boxster). But there is only one porsche. And it is still the car that everyone wants to see and ask about.

Of course, the fact that a Boxster is the perfect roadster with truly beautiful lines that are a work of automobile art are also huge factors. If the car were a piece of crap then it would be even more exclusive because noone would buy it, except maybe some posers until the reputation caught up with the reality. And that is something that the execs at Porsche have to keep in mind. Whatever vehicle they introduce into their product line has to live up to the badge.