The last thing expected to come out from a respected car maker such as Porsche was a Super-Utility-Vehicle. However, that was exactly what happened in the year 2001, when Porsche unveiled the Cayenne. Porsche enthusiasts were enraged by the idea. It took a while for many to accept the very concept of a four door Porsche, let alone the fact that it was a truck!
And the reason for this decision by Porsche – was to Survive on its own. The Porsche Company almost died an economic death in the early 90s. At this time of desperation, the company got a new CEO, Wendelin Wiedeking. He saw that the world had changed and so should Porsche. He explained, “For Porsche to remain independent, it can’t be dependent on the most fickle segment in the market…We don’t want to become just a marketing department of some giant [automaker]…We have to make sure we’re profitable enough to pay for future development ourselves.”
In other words, Porsche needed a new model, that would widen its appeal than what the 911 and Boxter were able to do. But the reason for deciding to make an SUV was the fact that SUV’s were hugely popular in the USA, which was Porsche’s largest market. Besides, 2 prestigious German car makers, BMW and Mercedes Benz were selling the X5 and the ML respectively with huge success.
It also turned out the majority of Porsche owners had at least 2 other cars with them, and one of them turned out to be an SUV. Clearly, Porsche knew what it was doing. If the Boxster had been a “bet-the-company miracle car,” the Cayenne was an astute hedge against the sports-car market’s inevitable next crunch. And a popular hedge it was.
Within a year of the U.S. launch, Business Week reported that strong Cayenne sales had helped Porsche pay down its debt to a modest $128 million and amass $2.1 billion in cash, this despite the SUV program costs. And Porsche’s net profit margin stood at 10.1 percent, tops in the industry. No wonder Business Week titled its story, “This SUV can tow an entire carmaker.”
The Cayenne was developed in collaboration with VW, who were making their first ever SUV, the Touareg. This was a sensible way to spread costs over two fairly low-volume products. The deal was announced in 1998.
The Cayenne was manufactured in a brand new plant in Leipzig, as there was no room to produce the SUV in its plant at Zuffenhausen.
And so the stage was set. The one remaining question was whether even a Porsche SUV could possibly deliver the performance, quality and excitement of Porsche’s sports cars. The answer to that is a resounding YES. The Cayenne went on to become a sales success, and changed Porsches financial condition. Porsche went on to become one of the most profitable car manufacturers.
At the same time, The Cayenne went on to be recognized as the most sporty and dynamic SUV on sale. It became famous for driving and handling like a sports car, and in Turbo form, proved to be almost as fast as a Carrera S through a track.
*Reference – How stuff Works [Online] – available from <http://auto.howstuffworks.com/porsche-cayenne-history.htm,>
*Image – [Online] available from <http://www.porsche.com/uk/models/cayenne/cayenne-turbo/gallery/>
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