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NY Times: Can Porsche Shine at Volkswagen?

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Old Aug 30, 2010 | 03:31 PM
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Post NY Times: Can Porsche Shine at Volkswagen?



"THE formal merger of Porsche and Volkswagen is not supposed to happen until next year at the earliest, but at the factory here that produces Porsche Cayenne S.U.V.’s, it seems to have started years ago.

The painted Cayenne bodies arrive by train from a Volkswagen factory in Slovakia, where they are made alongside the similar VW Touareg. Likewise, the basic skin and skeleton of the new Porsche Panamera sedan, also assembled here, begins life at a VW factory in Hanover.

Yet there are many subtle things that make the Leipzig factory — and what it produces — unmistakably Porsche. The plant uses fewer machines than Volkswagen’s big factories and sounds remarkably quiet, almost reverential, as workers in spotless red overalls and white T-shirts install equipment to each buyer’s specifications. Want gold plating on that shift knob? No problem.

“The customers should get their car, not just any car,” says Joachim Lamla, chief financial officer of Porsche Leipzig, as he shows a visitor around.

That fancy Porsches contain some plebeian Volkswagen genes has never been a secret, and it doesn’t seem to matter to the buyers sipping espresso in the elegant Porsche customer center next door to the Leipzig factory, waiting for the keys to their new cars — and perhaps, a high-speed spin on the track next door.

Sharing parts is one thing, but being taken over is quite another. For most of the last 60 years, Porsche and Volkswagen have been like a couple who never quite moved in together. Porsche supplied engineering expertise to Volkswagen and bought components and manufacturing capacity, but it carefully guarded its identity and independence — a formula that delivered some of the best profit margins in the business.

Now, with Volkswagen poised to acquire Porsche — in a deal announced a year ago that values Porsche at 12.4 billion euros ($15.6 billion) — many in the auto industry wonder whether they can make a marriage work. The risk, they say, is that VW bureaucracy could smother Porsche’s individuality, or that plans to offer less costly models could blur Porsche’s image as the ultimate in German auto engineering.

“The whole maxim has been, ‘We can’t let outsiders influence Porsche because we don’t want lesser minds to crush our ingenuity,’ ” says Jay Greene, author of “Design Is How It Works,” the first chapter of which is a paean to Porsche design genius. “Doing that in a big corporation is going to be a challenge.”

VOLKSWAGEN, based in Wolfsburg, is already drawing Porsche, based in Stuttgart, into a closer embrace. Martin Winterkorn, VW’s chief executive, is installing a longtime protégé, Matthias Müller, as C.E.O. of Porsche. And Mr. Winterkorn has begun musing aloud about how to expand Porsche’s lineup from four core models to six and to bolster sales by more than a third, to 150,000 cars a year.

On the drawing board is a somewhat smaller Porsche S.U.V. Mr. Winterkorn has also floated the idea of a car selling for less than the Boxster, which, at $47,600, is Porsche’s least-expensive two-seater, a few hundred dollars more than the basic Cayenne.

“We can build 150,000 autos without losing any exclusivity,” Mr. Winterkorn said last month in an interview with a German newspaper. (He declined to be interviewed for this article.)

Others are not so sure. “It will certainly not be the old Porsche,” says Ferdinand Dudenhöffer, a professor at the University Duisburg-Essen in Germany who specializes in the auto industry. “Porsche will enter a new era as brand No. 10 in a big company.”

Still, Mr. Dudenhöffer and others say that Porsche needs to adapt to huge changes in the upper reaches of the car market, and that it does not have the resources to do so alone.

These days, status-conscious buyers want to pull up to the country club in a car that looks green as well as sexy. (Even Ferrari is building a hybrid.) And automakers in all price classes worry that the Facebook generation is more interested in mobile phones than in fast cars; analysts say the phenomenon has already hurt auto sales in Japan.

The industry is also moving toward battery-powered vehicles, a long-term trend that could blunt a main selling point of conventional sports cars: their speed. Because electric motors reach maximum power much more quickly than internal combustion engines, even a humble battery-powered car may potentially offer Porsche-like acceleration.

Porsche, with sales of 6.6 billion euros, or $8.3 billion, last year, could not master the design and technical challenges of these shifts without a large, well-heeled partner. The vast resources of Volkswagen, with sales last year of 6.3 million vehicles, and revenue of 105 billion euros ($134 billion) will allow Porsche, which has never produced more than 100,000 cars annually, to support the costly development of new models that consume less fuel and have fewer emissions."

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Old Aug 30, 2010 | 03:34 PM
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Sad that the last independent automaker has been swallowed up. I really hope Porsche doesn't go the way of Volvo and Saab.
 
Old Aug 30, 2010 | 04:23 PM
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They've done great things for Lamborghini nd Bentley- I'm just worried about the dynamic between the two families blurring the line of what makes Porsche's great.


I dont think Porsche's should be attainable for everyone. They should remain, to an extent- more unique and exclusive.
 
Old Aug 30, 2010 | 04:38 PM
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Originally Posted by sean
Sad that the last independent automaker has been swallowed up. I really hope Porsche doesn't go the way of Volvo and Saab.
Don't forget BMW ! As independent as they come !
 
Old Aug 30, 2010 | 04:42 PM
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Originally Posted by Clubber
Don't forget BMW ! As independent as they come !
They own Mini and Rolls Royce...
 
Old Aug 30, 2010 | 05:11 PM
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Whatever Porsche does, at least we know they will still build sportscars.
 
Old Aug 30, 2010 | 06:41 PM
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It should be S.U.V.s not S.U.V.'s - there no possessive. ****ing NYT.
 
Old Aug 31, 2010 | 03:39 AM
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Originally Posted by sean
They own Mini and Rolls Royce...
Yes but BMW owns them, they don't own BMW !
 
Old Sep 15, 2010 | 01:19 PM
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Originally Posted by STOPPIE
They've done great things for Lamborghini nd Bentley- I'm just worried about the dynamic between the two families blurring the line of what makes Porsche's great.


I dont think Porsche's should be attainable for everyone. They should remain, to an extent- more unique and exclusive.
Are they discontinuing the Boxster?
 
Old Sep 15, 2010 | 03:35 PM
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Originally Posted by topturbo
Are they discontinuing the Boxster?
Its a Porsche, not a kia. It's still not attainable for everyone. Smarty pants.
 



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