Porsche Gambling The Farm On The Cayenne

Agent001 submitted on 5/2/2003 Auto Spies Photos Timestamp: 12:13:15 PM

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Porsche Gambling The Farm On The Cayenne

Will it payoff?

Porsche hopes Cayenne spices sales

Highlights from the article from USA Today:

Today, Jobs and 131 other North American Porsche dealers are in polished new buildings dedicated to the brand; 62 other dealerships will be rebuilt in the next two years.

It's all thanks to the promise of the Cayenne sport-utility vehicle, a Porsche bet that something bigger than a two-seat sports car would help it grow and keep it independent.

No way could I ask dealers to sink hundreds of thousands of dollars into new facilities unless the Cayenne was coming, and frankly, I doubt Porsche would be able to stay an independent company without it."

"It's no exaggeration to say that if the Cayenne were to flop, the company's independence could be in serious question," he says.

Porsche clearly knows how high the stakes are. The automaker and its dealers have spent $1.5 billion on the launch of the Cayenne, including a new factory in Leipzig, Germany; the dealership upgrades; and pre-launch marketing. That is almost one-third the company's revenue last year. General Motors and its dealers would have to put $60 billion on one model to match the same bet Porsche is making on Cayenne.

Porsche is counting on Cayenne to nearly double North American sales to 50,000 and worldwide sales to nearly 100,000 by 2006.

So far, the SUV is a hit. Porsche sales were up 26% in March, on the strength of 854 Cayennes delivered. At the same time, 911 sales were down 23%, and Boxster sales were down 28%.

Auto Spies perspective: We predict the huge gamble they’re taking, won’t payoff. The Cayenne is ugly and overpriced for what you get. Just look at the Infinti FX45 and Touareg (both better looking and more bang for the buck) and you’ll know where we’re coming from. Porsche will be lucky to hit their first year target and will struggle thereafter, to move the SUV, with the face of a blowfish.

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