Are Porsche's Latest Actions Sacrilegious?

It is the tale of a company that is as torn between two identities as Batman’s villainous Two Face. Evolution can be seen as merely a sign of the times or as a brave, innovative step in a company modifying its mission.

Stuttgart-based Porsche seems to have been living a double life recently and the question remains, has Porsche diluted their brand?

Beginning with the introduction of the Cayenne sport utility vehicle, Porsche was initially slammed by numerous enthusiasts claiming that Porsche had killed the brand and what it stood for. An SUV, which weighed over two tons, based upon the Volkswagen Touareg?

Porsche had been known for producing vehicles with a passion for spirited driving and held a strong racing heritage. Now, they were to produce SUVs? Blasphemy. If this had not been enough, soon Porsche announced plans for a Cayenne V6 which would utilize a VW engine. Purists rolled in their graves.

Speaking on this, Goldman Sachs analysts said the car would "push Porsche's brand credibility to the absolute limit. It would be plainly apparent that it contained a VW engine.''

Although production of the traditional 911 Carerra has remained constant with numerous refreshes, and a switch from air-cooled motors to water-cooled engines, new and bold plans have continued to stream out of Stuggart.

The new four-door saloon, the Panamera, was revealed this past November. Aimed to compete with Maserati’s Quattroporte and Aston Martin’s Rapide, the vague details from Porsche stipulate the Panamera will utilize V6 and V8 engines with somewhere between 300 to 500 horsepower.

Plans for hybrid systems have been discussed for both the Cayenne and all-new Panamera while diesel motors for the Cayenne started production this week. This diesel motor is sourced directly from Audi AG and is a 3.0-liter V6 TDI producing 240-hp.

With this previous summer’s gas prices ratcheting up and the European Union enforcing higher miles per gallon, is this merely a sign of the times? Could this be pressure from Porsche trying to innovate and take advantage of different markets? Or, has Porsche sold out?

The film Boiler Room said it best with “honor is in the dollar, kid.”

motor1 - 12/30/2008 5:53:18 PM

+1 Boost

I reckon the Panamera isn't going to be against Porsche's aim when they started, to build high quality sports cars, but the Cayenne definitely blew it all west.

It is really a truly awful car. They should have bothered about the Panamera before building a flimsy mid-life crisis man car.

The same happened with Jaguar but as of recent they are beginning to go back towards their goal of building luxury cars that weren't compromised by price.

mini22 - 12/30/2008 6:41:50 PM

+1 Boost

I've said this many times before and I will say this again.Selling cars is a business 1st and foremost.In the early 90's Porsche only sold sports cars and they were on the ropes financially.The Boxster was their savior back in 96 and 97 even though 4o% of it was identical to the new 911 that came out in 99.The next savior was the Cayenne. If adding other auto segment models to a companies inventory to help it survive is diluting the company so be it. Would it have been better for Porsche to be bought up by a larger auto conglomerant and remain virgin pure? They obviously did not think so.Had they not come out with the Cayenne that might have happened.Porsche is now more then just a maker of exclusive sports cars.They are now a large company including owning most of VW.The difference is they are pulling the strings rather then having their strings pulled by someone else. Who knows if someone else had bought them Porsche could have been reduced to nothing more then an engine or suspension option package. So I say "to hell with religion accept what makes sense in terms of dollars and cents". As for Goldman Sachs analysts I wouldn't trust em now!

EL34 - 12/30/2008 7:23:02 PM

0 Boost

I'm thinking of buying a Panamera :-/

Neverfollow - 12/31/2008 11:11:41 AM

0 Boost

Funny, no one has that poor taste. If I was a Porsche dealer, I wouldn't buy a single one unless someone put down a huge 50% deposit and ordered the car.

dayday - 1/1/2009 1:07:06 AM

+1 Boost

i actually think they look okay...i m weird...

quizz - 12/30/2008 10:59:23 PM

+1 Boost

Don't be ridiculous. Porsche did NOT sell out - it had to do what was necessary to survive, which is a big difference from the excessive greed that is inherent to a "sell out". As mini22 said, it's all about survival and Porsche definitely succeeded there, unlike Lambo, Rolls and Bentley, all of which are owned by German conglomerates.

richardposluszny - 12/31/2008 1:15:32 AM

+1 Boost

Excessive greed, eh?

What do you have to say to this?

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A study by B&D Forecast released in German newspaper Welt am Sonntagearlier this week revealed that Porsche, one of the most prestigious names in the automotive industry, is by far the most profitable automaker on a vehicle by vehicle basis.

Porsche makes an unheard of €21,799 profit on each car it sells! This isn't to say that Porsche is making €21,799 ($28,247 USD) straight up on every vehicle it makes, but rather that it earns variable profits, with some more (Cayenne Turbo S) and some less (Boxster).

To see just how badly Porsche blows other automakers out of the water, have a look at these figures. BMW makes €2,475 ($3,207) for each car it sells - a handsome figure, no question. Toyota pulls in an average of €1,684 ($2,182), while Audi makes €1,580 ($2,047). DaimlerChrysler (including Mercedes-Benz and Smart) makes €708 ($917), and VW makes just €332 ($430) per vehicle.

The study, which looked at the company's finances over 2005-2006 financial year, also revealed that Porsche sold 97,000 units and had a record gain of €2.11 billion ($2.73 bn) before taxes.
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Granted, this is not relying SOLELY on vehicle sales -- this also takes into account investments on their financial statements.

richardposluszny - 12/31/2008 1:17:34 AM

+1 Boost

Link enclosed below:

http://car-reviews.automobile.com/news/porsche-posts-28-247-average-profit-per-vehicle/2628/

100octane - 12/31/2008 8:15:09 AM

+1 Boost

the 21,799€ were the result of their advancing stocks and not the result of their production/selling price

chewy - 12/31/2008 3:38:37 AM

+1 Boost

I would imagine there is a good amount of people that buy the Cayenne for the badge. Heck they look past its questionable looks, same thing with the Panamera.

for a Cayenne V6 which would utilize a VW engine. Purists rolled in their graves.

Speaking on this, Goldman Sachs analysts said the car would "push Porsche's brand credibility to the absolute limit. It would be plainly apparent that it contained a VW engine.''

Those purists should brush up on a little history about Porsche, the first one shared a lot with the Beetle. If anything, Porsche is going back to its roots.

http://en.wikipedia.org/wiki/Porsche_356

And I doubt that more than 10% of Cayenne V6 owners know where their engine comes from.

richardposluszny - 12/31/2008 4:33:47 AM

+1 Boost

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Those purists should brush up on a little history about Porsche, the first one shared a lot with the Beetle. If anything, Porsche is going back to its roots.
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Bit of a stretch when we're discussing a 4,700 - 5,100 lbs SUV.

Perhaps if it was a Cayman variant with a VW engine shoehorned in there.

JUGNU - 12/31/2008 5:27:15 AM

+1 Boost

I think the summary is, by all these moves done by Porsche like introducing Cayenne SUV, using VW engines, Panamera Saloon, diesel engines and now rumours of more Porsche-VW-Audi joint ventures in the future has brought the company's image and prestige a little bit down. Owning a Porsche is not very exclusive anymore.

I agree with all of this and i think Porsche should remain independent of VW and it's groups major parts like engines and chasis. Cayenne should be the only model sharing parts otherwise the company's image will further get hit, especially in the eyes of enthusiasts and experts and i fear term 'rebadge VW' doesn't form.

JUGNU

993Turbo - 12/31/2008 7:04:37 AM

+1 Boost

What's the problem? If they sell cars, that's the whole point. Considering how other car companies are doing, I'd say they are in the cat bird seat. I absolutely love my Cayenne and so does everyone else that has one. I didn't buy it because it's a Porsche, I bought it because its the best SUV I've ever driven and because it's a Porsche. Now, if people will go in for the new ugly duckling, they will be in clover.

100octane - 12/31/2008 8:32:07 AM

+1 Boost

the panamera design starts to grow on me

olscuul - 12/31/2008 10:34:29 PM

+1 Boost

in a few years, all the q7's, x6's and panamera's will be bought back, chrushed, and history books will be rewritten without them.

DieselRules - 1/2/2009 3:19:12 AM

+1 Boost

Q7s are hot sellers in Vancouver! And Cayenne's seem to be the vehicle of choice for trophy wives ... I haven't seen one yet that isn't driven by a hot blond yacking on a cell phone.
I doubt that these chicks look under the hood.

scottyroberts - 1/1/2009 3:49:28 PM

+3 Boost

Here's what I know about most purists... They buy nothing but used cars from one another, they jerk them selves off at rided and drive car club events, and have an opinion about everything that is contrary to remaining cutting edge and pioneering a brand!

Having worked for a Porsche dealer when the Cayenne rolled out, personally I can tell you the Cayenne was a God Send. Sales of the Cayenne alone accounted for a 19 month reduction in the return on investment after purchasing the franchise. It put the company back on the lips of the the press, made Porsche Cars one of the most profitable car companies on the planet, (allowing them to be less reliant on Porsche Design for working capital) and gave the buying public one hell of an alternative to buying and X5 or ML500.

Say what you want, the Cayenne was a very welcome addition to the product line, as I am sure the Panamera will be.

DieselRules - 1/2/2009 3:16:02 AM

+1 Boost

and even a V6 Cayenne can be taken off road without it breaking ... something you can't say about the RX350

DieselRules - 1/2/2009 3:11:44 AM

+1 Boost

Porsche started in the 50's with re-bodied VWs (the 356) before developing their own engines
They sold the 912 in the late 60's -- a 911 car with a VW engine.
In the 70's we got the 914 which were also VW powered (except for a few, rare 914-6 models that got Porsche motors)

Porsche have always been heavily based on VW parts and technology. They also out-source almost everything, and VW receives most of those contracts too.

There is nothing changed at Porsche, other than expanding the markets that they are entering.

The purists would have them sell nothing but 911's but there is no growth there. They already own the rear-engined sports-car market.

DieselRules - 1/2/2009 3:14:05 AM

+1 Boost

PS: I think the Panamera looks pretty good and would certainly warrant a test spin if I was shopping in that price bracket (but I'll hold onto my old A6 2.7 twin-turbo 6-speed a while longer ... it only has 175,000 miles on it so far :)

autopromissa - 1/3/2009 1:33:56 PM

+1 Boost

All Porsches are good and well engineered cars, just like Audis and Volkswagens for that matter. However, Porsche's niche and brand value is based on its motorsport legacy and exclusivity enabling this relatively young car manufacturer demanding premium pricing for their products. I own a (watercooled) C4S and a GTI and as a car enthousiast I find it more and more difficult justifying the 1:5 price difference between these 2 cars. Porsche's current strategy makes sense from a financial perspective and its marketing, focused on a more mainstream audience, seems to work. Porsche started as a pioneer and is now leveraging its heritage generating healthy profits relying on Audi/Volkswagen R&D. As a result we see Porsche implementing diesel technology and we see other innovative niche players (such as Tesla, Fisker and even Ruf) experimenting with thought leadership technology and engineering. Let's hope they don't make the same mistake as the D3 and that they re-engineer themselves again as an innovative company.