Traction Inc.

Porsche CEO: Small Sports Car Would Hurt Brand

For several years now the rumor mill has had Porsche in talks with parent company VW to introduce a new small sports car platform that would give Porsche a model below the Boxster (which these days starts at $50K). And once again the word from on high is that the project has been cancelled.

CEO Matthias Mueller said this week, “We would do no good to the brand if we were to lose traditional Porsche customers… Possibly we need to wait until the next generation of customers before the idea of a small roadster will work for Porsche.”

Because, you know, historically Porsche buyers have disliked small sports cars.

How ironic then that worry about the loss of ‘traditional Porsche customers’ didn’t impede the rollout of the Panamera sedan, Cayenne sport-ute and the upcoming Macan crossover.

Today 75% of Porsche buyers are buying sedans and SUV’s. A decade ago (‘traditional Porsche customers’ - right?) that number was 0. In any case, it seems that tarted-up Volkswagens must be the new Porsche ‘tradition.’

The Evo is dead.  Long live the Evo.
Turning its back on its storied rally racing heritage, Mitsubishi is ending production of the Evo as the company shifts its focus to developing electric vehicles.  The day of the mighty Lancer Evolution is over, and with it goes the only memorable product Mitsubishi had in its lineup. (via motomania)

CEO Matthias Mueller took the reigns at Porsche last year after serving as an executive at Volkswagen, Porsche’s new parent company.  Mueller revealed VW’s plans for its Porsche brand in an interview with Automotive News Europe:

What are your most important objectives?
We want to remain the world’s most profitable car manufacturer and build on this position.
Read as: Heritage and authenticity take a back seat to maintaining industry-leading profits.

What are the greatest challenges facing your product strategy?
Each year we want to bring a new Porsche to market.
Read as: Expect more shared platforms with VW’s other brands.

Can you reach the sales goal set by VW Group boss Martin Winterkorn of 150,000 units by 2015?
Our objective is to have more than 200,000 units a year by 2018.
Counterpoint: Porsches were once exclusive – the company built less than 20,000 cars in 1996.

What new 911 variants will there be in terms of body and drivetrain in 2012?
With the 911, we are up to 22 derivatives. We use this as an example for the other models… We are planning a hybrid concept in each model line.
A Porsche for every niche and every driveway?

Last year, the United States was your largest single market, followed by China and Germany. Will China overtake the United States as your largest market?
I am assuming that our ranking will change. It is likely that in the short term China will become our largest market worldwide, thereby supplanting the United States. 
Read as: To expand sales in China, expect Porsche to focus even more attention on developing sedans, SUV’s and other volume platforms.

Will the next 911 be a sales leader?
No, that’s not achievable because the segment is simply not as big as an SUV or sedan segment.  
Read as: Sedans and SUV’s have become Porsche’s bread and butter.  Sports car sales contribute much more to the brand’s image than its bottom line.

» Report: Porsche mulling diesel power for U.S.

First Porsche rolls out SUV’s, then sedans, and now diesels?

Porsche = Audi = VW.  They are already sharing platforms and engines, and pretty soon you won’t be able to tell them apart. It’s nearly inevitable, and it will happen sooner than you think.

(previous)

It’s no secret that I’m distraught to see automakers tarnishing their brands’ heritage in search of short-term profits.  Complaining about Porsche’s decent from a boutique sports car company to a volume truck company, I wrote:

“Why not build a SUV variant for VW’s other premier brands…  Maybe give it an Italian style makeover and sell it as a Lamborghini?  Or give it a soft suspension and really nice interior and sell it as a Bentley?  Or Bugatti?  …Because doing so would destroy the image of those iconic brands!  So please VW, don’t do this to Porsche.”

Imagine my surprise when I read in Auto Express that Lamborghini is making plans to produce its own version of the upcoming small Audi/Porsche SUV.  The article states that “with no direct rivals from other supercar makers, it should be a hit.”

A hit?  Like hell!

What’s next, an affordable Bentley based on the Golf?  An Aston Martin built from a Toyota?

Update:  According to GTSpirit, what’s next are versions of the Porsche Panamera badged as the Audi A9, Lamborghini Estoque and even as a Bentley.  VW is walking a very fine line here - the more it shares models between these brands, the sooner they lose their individuality and become ‘just another car company’ in a crowded marketplace.

BMW Jumps the Shark

Times are tough for carmakers.  Sales volumes are down, profit margins are razor thin.  In this environment it is critical that carmakers don’t make any mistakes as they defend their place in the market… Which is why I’m so critical when I see my favorite auto brands making boneheaded decisions.

Take BMW.  For generations, BMW has taken pride in producing some of the best sport sedans on the planet.  Their cars featured smooth, powerful engines, excellent balance and handling, and rear wheel drive.  And from among these, the flagship M3 model offers Porsche 911-like performance and sophistocation, but with much more practicality and a lower price tag. The BMW M3 has become an automotive icon, the benchmark by which all other sports sedans are measured.

Given that, today’s news that the M3 sedan is to be replaced by an awkwardly styled five-door hatchback is stunning.  If the M3 is so widely lauded, why on earth would BMW push it into a new market segment?  Is it because Porsche is trying a similar move with its ugly five-door Panamera?

This week BMW also confirmed its intention to begin selling entry-level, front wheel drive cars.  Nevermind BMW’s long history of RWD performance cars, or that BMW’s MINI division already sells cars in this segment.  Pushing for profit has eclipsed common sense.

BMW, Porsche, Lotus — Please don’t turn your back on your heritage by entering market segments where you don’t belong.  Short term sales volume gains are not worth erasing what your companies stand for.  Abandon what makes your cars unique and before long, buyers will forget why your cars are any different than everything else on the road.

Porsche - 60 Years of Legendary Sports Car Heritage
…which apparently culminates in an awkward looking luxury sedan.

(via itcars)

» Traction Inc.: Porsche, the Premier German Truck and Sedan company*

motoriginal:

“I totally agree with you. I’m sick of VW’s direction of Porsche…they didn’t do this with Lamborghini or Bugatti and I hope to the car gods they don’t.”

tractioninc:

Well…… Lamborghini is selling as much as ten times the number of cars under VW as they were producing in the 90’s, and there is a lot of Gallardo in the R8. It’s hard to know what to think anymore.

motoriginal:

That’s what I don’t understand…why have they done such a good job with Lambo and they’re basically shitting on Ferdinand Porsche’s vision of amazing little sports cars

Bad things happen when automakers focus on making money instead of making great cars.

» Traction Inc.: Porsche, the Premier German Truck and Sedan company*

s0leful0ne:

Well said. I agree that the brand is being diluted, and am not a fan of it, but its a necessary evil. Ideally, Porsche’s will be Porsche’s. Unfortunately most car buyers would not know what fits under the VAG umbrella and would not associate the brands with each other. I don’t believe that the Cayenne and Panamera will sucker a true Porsche fan into buying one of their alternative models. The other models, are for the vast majority of people who are solely interested in satisfying the upper tiers of Maslow’s hierarchy of needs and will mindlessly buy anything with positive brand cachet (blame the rap industry). 

On a side note: If i remember correctly there was a Lamborghini SUV concept a few years back (definitely a bad idea, but they definitely considered it). And similar to the Bentley connection, the latest Rolls is…a stretched 7 series. So whether we like it or not, it happens. Also, for a real laugh, consider the Aston Martin Cygnet. 

TVR, a fantastic sports car company, couldn’t survive on sports cars alone. Fisker, who used to do fantastic coachwork for MB SL’s and BMW 6ers, is currently pushing a 4 door hybrid in order to stay relevant. If there was anything learned from GM’s folly, the auto industry has to adapt. If brands don’t adapt…they die.

Not every consumer can be as passionate or devoted as us car fans. Although we may be a very vocal group, we actually make up an infinitesimal percentage of car buyers. (Just look at how many Camrys and Accords pack US roads). 

It sucks that the brand is being tarnished in this manner. But in return, we get 22 discrete varieties of 911s, the Boxster, and the Cayman. (If i remember correctly, the Boxster was also highly reviled as diluting the Porsche name while it was in conceptual stages.) I’m thankful that these days Porsche’s are reliable and nicely equipped (Porsche is among the top brands of JDPower rankings).

As much as it hurts to see the industry flooded with products unsavory to the enthusiast (hybrids, SUV’s, and Minivan’s), I’ve come to terms with it. Selling Cayennes to soccer moms is what it takes for Porsche to keep making fantastic sports cars for the dedicated few.

*also no offense was intended in the original or current post. I thoroughly enjoy your blog and simply hope to offer a different perspective. 

You’re right - the reality of the auto industry these days is that parts and platform sharing is the only way to get production costs down far enough so that automakers can produce the specialty niche vehicles that enthusiasts crave.

But I feel strongly that pushing niche brands to play in mass market segments is a recipe for mediocrity.  As is letting VW design future Porsches.