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Old 01-30-2006, 10:45 AM   #1
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Will Porsche do themselves in?

Does anyone think that Porsche will do themselves shortly with so many cars available? During most of the 90s Porsche only had 2 or 3 cars to choose from. Now there is the Boxster(and the S),911(there are currently eight models soon to be nine),Cayman S,Cayenne(Cayenne,Cayenne S,Turbo and Turbo S),Carrera GT, GT3 and GT2 and soon to be Panaroma(I think that how you spell it) and talk of a new 914. Do not get me wrong,I have liked and enjoyed every Porsche I have been in(including 944s). I think that Porsche is making their market too big for a entry level sports car at $45k(Boxster) and the entry level Cayenne at $42k. I do not think that the majority of the population has this much money to spend on a car,especially a entry level non optionally equipped car. Now from a manufacturing standpoint why do they have the Cayenne Turbo and the Turbo S? Is the 0-60 in 5.2 seconds not enough,the Turbo S hits it in 4.8! That can keep up with their legandary 911! Shouldn't Porsche just make the Turbo S and knock the Turbo out the window? Just wondering if Iam the only one feeling this way.
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Old 01-30-2006, 11:21 AM   #2
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I think the consumer is "driving" this response from Porsche.
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Old 01-30-2006, 11:23 AM   #3
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It's so difficult to say. But we must recognize the fact that the Cayenne SUV has been a huge success. Introducing cheaper/entry level cars and hi-end sedans won’t be has harmful as long as they promote and support factory and independent racing teams. If they do that I think the brand promise can still be maintained. But all bets are off if they come out with a Corolla.


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Old 01-30-2006, 11:27 AM   #4
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Interesting question, Blinkwatt.

Mercedes comes immediately to mind as a cautionary tale. The brochure for the MBZ model year 1969 featured a grand total of six different vehicles. In the decades since, the number of models has increased dramatically, and by many accounts, the quality has *decreased* just as dramatically. Coincidence? I'm not sure. But during this expansion, and even before the merger with Chrysler, the quality and luster of this once revered nameplate has dimmed considerably.

My '69 280SL, with 160,000 miles is astonishingly solid, dependable and sure of the road--especially for a 30+ year old car. When it came time to buy another car last year, looked at the new MBZ's and went with the Porsche.

It's good that Porsche is broadening its product line, but hopefully, it will remember that quality and reputation take decades to achieve and can be undone very quickly if it loses focus of its core values and strengths.
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Old 01-30-2006, 11:35 AM   #5
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I don't know if they'll do themselves in or not, but despite your list of cars, there are only a few platforms involved.

Correct me if I'm wrong, but the 986 and 996 were designed concurrently...with at least everything in front of the doors being "the same."

I'm assuming the 987 and 997 have been similarly designed. The Cayman is a hardtop 987, No?

The GT3 and 2 are just upgrades, for all practical purposes.

The Cayenne platform is from VW. Toureag (sp?), and again, the engine and suspension changes are just options, no matter how the marketing people spin it.

I work for Ford, and they sell a bunch of F250s. I can make a similar case that they currently offer more versions of it than the number of Porsche models offered throughout it's entire history.

But then, they are doing themselves in.

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Old 01-30-2006, 02:11 PM   #6
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Quote:
Originally Posted by blinkwatt
Does anyone think that Porsche will do themselves shortly with so many cars available? During most of the 90s Porsche only had 2 or 3 cars to choose from. Now there is the Boxster(and the S),911(there are currently eight models soon to be nine),Cayman S,Cayenne(Cayenne,Cayenne S,Turbo and Turbo S),Carrera GT, GT3 and GT2 and soon to be Panaroma(I think that how you spell it) and talk of a new 914. Do not get me wrong,I have liked and enjoyed every Porsche I have been in(including 944s). I think that Porsche is making their market too big for a entry level sports car at $45k(Boxster) and the entry level Cayenne at $42k.
I don't think it's a problem as long as performance is the target and each line is reaching a different market and they don't step on the toes of the 911 buyers. The Boxster is "entry level". The Cayman is for people who want a two seater, hard top performance car. The 911 is the star of the family for the guy who wants a performance car and can afford the best. The GT series are for the true racers. The Cayenne is for people who need an SUV but don't want to sacrifice performance. The same will be of the Panamera with people wanting a four door sedan without sacrificing performance. (Btw, I believe the 914 thing is a rumor since the Boxster is basically the 914 with modern features.)

As for price, have you seen what American cars sell for now? Given the choice between a Chrysler Crossfire convertible at $35K-$40K and a Boxster it's no contest. As for SUVs, they all start in the $30-$40K range now so the superior Cayenne is pretty close, especially when you get into the large or specialty (Escalade, H2, etc.) SUVs. My daughter has wanted an Escalade since she saw them and I told her I didn't believe it was worth the money. Then she saw a Cayenne when we were in London and she said "that's a really cool SUV, what is it". I told her it was a Porsche and about the same price as the Escalade. From her experience in our Porsches she immediately changed her mind and said "that's what I want."

I believe with anybody, if they can get a car buyer to drive the Porsche that's physically comparable to whatever they are looking at, that's it. They will figure out how to come up with the extra few $$ to get into that car and have that feeling every day. I bet everyone here remembers the feeling of their first Porsche drive.

Porsche isn't a car.....it's an experience. Once you have a Porsche, you never want to be without one.
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Old 01-30-2006, 02:33 PM   #7
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Originally Posted by blinkwatt
Does anyone think that Porsche will do themselves shortly with so many cars available? During most of the 90s Porsche only had 2 or 3 cars to choose from.
From what I understand about Porsches history the early to mid 90's were one of the hardest times for Porsche financially. It has been since they brought on the Boxster that they really became solid and since they introduced the Cayenne that they have really gotten back on top of their game. Heck, they just purchased a good chunk of VW. So with the introduction of each new model they seem to be doing a bit better. Eventually, maybe they will have such a large line that they are viewed as more of a "BMW" or "Mercedes" kind of company. Is this bad? Who knows, only time will tell. And as long as I have my Boxster, I'm happy as a clam.
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Old 01-31-2006, 03:09 AM   #8
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As long as Porsche retains exclusivity, I will be happy. The reason I don't drive a Merc or a BMW is because every soccer mom, geriatric and young kid who was lucky enough to get a good job out of college has one. Also, because (this is where you say it with a Darth Vader voice) "THERE IS NO SUBSTITUTE!"
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Old 01-31-2006, 09:51 AM   #9
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The company's never been healthier (I read recently that they're the most profitable manufacturer in the world?) and they really only have 4 models: Boxster, Cayman, Carrera and Cayenne. All the other S, Turbo, etc. designations are effectively just options.


As for having a Turbo and a Turbo S in the same line, I suspect that "S" is a high margin letter for the people who really have the money.
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Old 01-31-2006, 10:20 AM   #10
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It’s certainly true that Porsche has the highest margins in the industry. It’s clear that Porsche management knows how to make a Euro! It’s also clear they are expanding into other segments. What’s not clear is why?

As they are now the largest or second largest share holder in VW, the other being the government of lower Saxony. They have access to one of the worlds largest distribution channels. As well as an extensive parts bin, Audi, Bentley, VW, Lambo, Bugatti, and a few others I'm sure. A future of hi-volume products seems likely.

We can only hope that Porsche management continues to produce products that justify the price point. If Bentley and Lambo are indicators I'm sure we'll all be pleased with the future .....we just might not be able to afford it.


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Old 01-31-2006, 10:33 AM   #11
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its easier to build 4 good cars than 9 good cars. But its also riskier to have a small product line. Sounds like the Porsche guys are changing their outlook and diversifying the risk.
Porsche has to be careful IMHO because the Porsche brand is exclusive. Even the Boxster at $50,000 is a very expensive car by what its main competitions can offer on paper. Introducing low cost cars or having sigificantly more cars on the road is going to cut into the 'exlcusivity' that appeals to so many new P-car buyers.
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Old 01-31-2006, 11:33 AM   #12
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Hi,

From my experience, Exclusivity seems to be much more important to Porsche Owners than just about any other group of Enthusiats, except maybe Ferrari Guys.

As I've said before, Badging means nothing to me at all. I owned my last Porsche in 1983 ('67 912). Since that time, I've owned 2 Lotus, a Jag, and one Ferarri. My Esprit is one of 61 made, that even more exclusive than the 550 Spyder!. I don't own it for that, I own it for how it drives!.

If I came across a car with the Styling, Performance and Feel of my Boxster, I wouldn't care if it sported a Yugo Badge, it would still be an Excellent Car, and one which I would want to own.

Porsche doesn't care if you want Exclusivity, you are not a Customer of theirs, you were, they already got your money. They're going after the guy who has yet to own one, and an Entry-Level Car is a way of accomplishing this. Besides, moving the Brand toward the Center of the Market allows them to expand their line into other types of Cars in the Future as well. And, who nows where the Porsche/VW relationship will go in the Future? It is already rumored that in addition to the 18.5% stake Porsche already has, that they're likely to pick-up another 3%-5% in '06. Consolidation is a mainstay in Business Strategies, so a move in this direction would not be at all surprising either.

All this Chicken Little - The Sky is Falling retoric is kind of Silly. A little Reality Check - Porsche is going to do whatever they think they need to in order to sell more cars and to increase their Shareholders Equity. That's what they're in business for, not to satisfy your demand for Exclusivity...

Happy Motoring!... Jim'99

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Old 01-31-2006, 01:04 PM   #13
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Yep Porsche and Ferrari have very exclusive image brands no point in arguing whether its a belief held only by its owners or the public at large or if its good thing or a bad thing but its definitely driving new and used sales. The same can be said about most first time Mercedes owners I've known over the years.


Actually I personally never really wanted a Porsche. I wanted a 944 back a long time ago because I thought the 944 had a modern look about it vs. the bettle-looking 911 which I always found to be boring back then. I was recently reprimanded by a female friend for driving "such a fancy car". I told her if I wanted a "fancy car" I would have bought a BMW or a Merc. I have a sports car not a "fancy car".
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Old 01-31-2006, 01:41 PM   #14
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Porsche doesn't care if you want Exclusivity, you are not a Customer of theirs, you were, they already got your money.
Actually they do care. Lets face it the people on this forum are not the "typical" Porsche buyer. The typical, American, buyer buys it for status and will no longer buy the car if it looses that status. They drive the cars in major cities, rarely seeing the open or back country road, and I doubt they ever come close to pushing the car to its limits. Just today I saw a yellow Lambo driving around DC. Do you REALLY think that person was driving the car because of its performance?

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Old 01-31-2006, 03:16 PM   #15
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I will go back to one of my earlier comments.

Never overestimate the executive management of auto manufacturers. The industry's histroy is one of over-reaching, over-diversification, major product mistakes, strategic and tactical blunders.

Porsche management is not immune to this disease. In many ways, one COULD assert that the thought that their management team can turnaround VW is a major act of hubris.

Of course, VW management is not a tough act to follow, but Porsche mangement has been successful with three model types. That is fine, but it doesn't make them Toyota either.

Time will tell.

As Elmer Fudd would say, "be very quite, I'm hunting rabbits!
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Old 01-31-2006, 03:39 PM   #16
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Correction!!

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As Elmer Fudd would say, "be very quite, I'm hunting rabbits!

Not exactly...I think he said..."I'm hunting wabbits"!!!
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Old 01-31-2006, 05:47 PM   #17
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Hi,

Porsche doesn't care if you want Exclusivity, you are not a Customer of theirs, you were, they already got your money.
I would suspect that Porsche might disagree with your statement.

No manufacturer simply forgets or chooses to ignore someone ( let’s call this purchaser a “Customer” for the sake of it ) that has already bought a product and stays in business too long.

I would say Porsche very much considers anyone who has bought a car a “Customer”. Certainly they hope you will consider spending money again on another of their products. Certainly they count that you will frequent their dealer network spending on service and parts. In effect adding to the bottom line indirectly of purchasing another vehicle.

I sure they consider any current Porsche owner to be important if that “Customer” does nothing more then publicly display the product and answer questions from potential new car buyers.

Finally if they don’t care about marketing a exclusive product why not make cars that cost ¼ the cost of the boxster ( forget about performance and styling ) and just sell four times as many. The same net result relatively speaking, no?

I suspect that building a vehicle ( or line ) that have some very specific performance characteristics, characteristics not commonly found on other alternatives, is something that they have chosen deliberately. By definition this is a exclusive practice.

And a slogan like “There is no Substitute” … Smacks of exclusivity doesn’t it?
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Old 01-31-2006, 06:40 PM   #18
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Not exactly...I think he said..."I'm hunting wabbits"!!!
Actually you are correct!

Good one!

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Old 01-31-2006, 07:06 PM   #19
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I too, agree that Porsche does care about exclusivity. That is why they have not introduced the "Wagon S"!
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Old 01-31-2006, 09:07 PM   #20
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Hi,

OK, maybe you're right, I may have misstated Porsche's concern for exclusivity, but to what degree?

The allure of Unit Sales, Expanded Markets and Profits is a strong one, and never more strong than to a Company which is tasting Strong Profits for the 1st time in a long time.

Porsche introduced the Boxster and 914 amidst cries of discontent from the Faithful, even the Cayman will have a dilutive effect on the Flagship 911's sales. With all the Cars they've been selling the past few years, they must be concerned about saturation. If so, what to do? Expanding into new Markets seems to be the most prudent thing to do, and there's much more of a Market moving to Center than away from it.

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.

Unfortunately, Public Ownership of Companies brings with it an unfortunate necessity, namely posting positive numbers every quarter. Gone are the days when a small group of Owners or an Entrepreneur will take a longterm view and choose to forego Profit in the short term. Add to this that most Senior Managers and Directors Incentives are based more on the Stock Price of a Company. This can cloud their judgement, we've seen this time and again in recent years. They certainly are acting this way with respect to some of the Quality issues which have plagued the Company for the past 5+ years - Major Quality issues, No Recalls, Preserve Profit... to Hell with the Owners.

Porsche is now a very large company and so one should expect that they'll act the part. This means, that the Bygone days are just that - gone. Of course, this is all speculation, but, it will be interesting to see in which direction they actually head...

Happy Motoring!... Jim'99

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