M136ID. 14. The Future of Porsche

 

 

Until the major failure of Porsches take-over of Volkswagen, porsche’s then chairman Wendelin Wiedeking was supposed to occupy the chairman’s position at both Porsche and Volkswagen, and one of his major goals was to make Volkswagen take a considerable amount of cost out of its future product.

However, it was Volkswagen which turned out victorious, and bought over Porsche. Now, with Ferdinand Piech as the chairman of Volkswagen AG’s supervisory board, and chief executive officer Martin Winterkorn, they have decided to further expand VW’s portfolio among the 9 brands it owns along with Porsche. And what they are looking for regarding Porsche’s future seems to clear – Porsche has to sell more cars.

Presently, Porsche sells about 75000 cars per annum. Instead of increasing model variants of its current portfolio, the new bossed are demanding several new Porsche models to enter production, in a short 3 year span. Thus, they are targeting a figure of 150,000 vehicles to be sold annually.

Here is Winterkorn’s take on Porsche’s product line: The slow, evolutionary steps of the 911 have been too small. The Cayenne, even in its second generation (due later this year), is still too heavy, thirsty, and not innovative enough. The Boxster and the Cayman don’t sell in great enough numbers, and the new Panamera is too big and heavy. Above all, the Panamera’s chassis is used only for a single model today, which is not as profitable as it could be.

What to do?

PLATFORM SHARING: Volkswagen is very well know for its ability to create unique character out of careful modifications to a single platform over the number of brands they own. The Audi TT and Golf are a classic example. . Their driving characteristics, packaging, design, equipment, and appeal are different enough that customers may not suspect that the two cars have a lot in common. The platform-sharing strategy has worked for the group’s volume brands: Audi, SEAT, Škoda, and Volkswagen. In the future, platform sharing will be applied among the group’s premium brands: Bentley, Bugatti, Lamborghini, and Porsche.

1. BABY BOXSTER: The first planned step is the creation of a roadster to slot in under the Boxster. Ex-boss Wiedeking believed that a Porsche smaller than the Boxster might dilute the brand, but Winterkorn wants a Porsche-badged, small mid-engined roadster based on the two-seat VW BlueSport concept car shown last January at the Detroit auto show. When badged as a Volkswagen, a SEAT, or a Škoda, the production version of the roadster would have 120- and 200-hp gas engines. As a Porsche, the little roadster would have a twin-turbo four-cylinder making about 300 horsepower. There are rumors coming from VW’s Wolfsburg headquarters that suggest this new powerplant could be a horizontally opposed four-cylinder. Detuned, the new flat-four could also be used in Volkswagen cars such as the New Beetle’s replacement.
2. CAYENNE: This SUV’s 2017 replacement won’t retain the current model’s off-road capability and top speed of more than 160 mph. Instead, it will lose weight (while remaining the same size as today’s Cayenne) and get more fuel-efficient engines.
3. 911: Perhaps the most difficult question surrounds the future of the iconic Porsche two-door. Today, the 911 comes in 14 different flavors, but since the 911’s engine went water cooled in 1998, the changes between one generation and the next have been kept small to ensure the happiness of 911 loyalists. But Winterkorn’s intentions are now to change the 911 more extensively by implementing new technologies faster—just don’t expect the 911 exterior design to change dramatically. These new technologies will likely include the use of more lightweight components and more innovative engine and electronic technologies. For example, ultralight fiber-optic electrical architecture would shed pounds off the current car’s wiring harness, while a race-derived sequential gearbox would find its way into sporty versions (the 911 GT2 and GT3). Under VW’s guidance, the 911 could become a leader in innovative technology—and that’s what Porsche devotee Piëch wants to see.

*Reference – Car and Driver, by Juergen Zoellter – [Online] available from <http://www.caranddriver.com/news/volkswagen-begins-to-map-the-future-for-the-house-of-porsche-car-news,>

*Image – [Online] available from <http://www.themotorreport.com.au/49917/porsche-918-spyder-plug-in-hybrid-concept-revealed-ahead-of-geneva&gt;

M136ID. 13. Strengths and Weakness

Porsche may not be a large scale manufacturer, but still has a very large footprint for its sports cars, racing heritage and most importantly, an Automotive Icon. Porsche loyalists love and respect the brands purity in design, and unique character. This can be clearly seen with the slow and steady evolution of the 911 from the very beginning, rather than a revolution as seen in other manufacturers. The 911 is the only car that has been on sale for the past 4 decades and more. It may be a slow evolution of the model, but that is exactly what makes it a timeless machine, perfected in every minute detail with each generation.

Porsche also has a very strong influence and presence in the motor racing world. In fact, almost all cars that Porsche built are basically purpose-built racing machines. They have been victorious in almost all races they took part since the very beginning, especially in the Le Mans 24 hour races.

Even beyond Porsche fan base, Porsche enjoys a very premium image over the large public. Porsche is known throughout the world as a luxury car manufacturer.

At the same time, Porsche did take a radical step in manufacturing the Cayenne SUV. This car was a far cry from Porsche’s identity, and was immediately hated by Porsche loyalists. But if we look beyond Porsche’s image and identity, the Cayenne stayed true to Porsche’s DNA. It was the sportiest SUV ever, and drove more like a sports car, than a rugged mud plugger. This, indeed help Porsche a lot financially. The large sales of the Cayenne helped fund the Carrera GT concept, and that resulted in one of the best supercars of the decade. In addition, the sales of the Cayenne were so great that Porsche went on to become the most profitable car maker on earth.

In addition to all this, Porsche still makes the best handling roadster – The Boxter. This car has been constantly rated as the best handling car. The Cayman is a more upmarket Coupe version of the Boxter. They also make the 911 GT3, the most user friendly track day sports car. This car is what shows off what Porsche is capable of, and does best. Then there is the GT2, the more scary, and radical 2 wheel drive version of the 911 Turbo. Recently, they launched the Panamera – a 4 door fastback grand tourer. This car further enlarged Porsche’s market offerings. Though another radical step, the Panamera still stays true to Porsche DNA, and provides a very sporty and dynamic ride quality to 4 passengers. Thus, with a portfolio of all these great cars, Porsche truly is an iconic car manufacturer, with a very unique and identifiable image, character and attitude.

However, on the other scale, the recent relationship with Volkswagen has brought fear to Porsche enthusiasts. As VW group is very famous for sharing platforms with almost all their brands, there is a fear that Porsche will eventually lose its DNA, and uniqueness. This is still to be seen as the years progress, as there have been rumours of Porsches technology and platform to be used by other manufacturers. This includes a chance that the Panamera would provide underpinnings for an entry-level Bentley, a new Buggati sedan ans a super-premium Audi above the A8.

With the debut of the new 911 at Frankfurt, the upcoming launch of the 918 supercar hybrid, the rebirth of Porsche prototype racing and even the prospect of a new sub-Boxster 2-seater to complement an ever-widening product line, Porsche matters and will continue to do so for many years to come.

*Reference – Road and Track – [Online] available from <http://www.roadandtrack.com/column/porsche-matters>

M136ID. 12. Ownership. [Porsche and Volkswagen]

Porsche AG is owned by Porsche Automobil Holding SE “PORSCHE SE”. The company is basically owned by the Piech and Porsche families, along with The Qatar Investment Authority who holds a 10% share. The company is headquartered in Zuffenhausen. Through its investment in Porsche Zwichen holding GmbH, it owns 50.1% of Porsche AG, and 50.7% of Volkswagen AG.

The company was founded by Ferdinand Porsche in the year 1931 along with Porsche’s son-in-law Anton Piech, an Austrian Lawyer.

As a result of the present ownership structure, it can be said that Porsche is closely related to the Volkswagen brand, and all the companies that come under its ownership, such as Audi, Lamborghini, Seat, Skoda, Bentley etc.

However, unlike the brands that are directly owned by Volkswagen AG (where all brands share platforms to a certain extent) Porsche cars are more unique and have its own identity, character and image (except for the Cayenne SUV, which shares its platform with VW’s PL 7).

POSCHE AND VOLKSWAGEN MERGER [HOW IT ALL HAPPENED]:-

Porsche is renowned the world over not just for manufacturing iconic sports cars, but also for being a very profitable Car manufacturer. In the year 2008, Porsche made 6 times as much on the stock market as it did making cars. Thus it became one of the worlds most profitable company. Porsche maintained that its stock market trades were for one sole purpose – To take over Europe’s largest Car manufacturer, Volkswagen.

The real story

The names Porsche and Volkswagen have always been related to each other. Ferdinand Porsche designed the Volkswagen Beetle in the 1930’s. He then went on to start his own company, which went on to become famous as a Sports car Manufacturer. The Porsche family still owns the company, and now wanted to own Volkswagen itself, a company about 14 times the size of Porsche. Volkswagen is a giant, which owns major European Car brands such as Audi, Bentley, Bugatti, Lamborghini and Seat.

The recession of the early 1991’s hit Porsche really hard. It was a very bad time for Porsche, and their very own survival was at risk. It was then that Wendelin Wiedeking was appointed Chief executive. He is, along with the Chief finalcial officer Holger Haerter, widely credited for turning the companies fortunes around.

Wiedeking had taken extremely risky decisions, to come up with new models. They also had to slash production costs, and more importantly used Porsche’s cash to enter the financial markets. These factors proved crucial to Porsche reaching the stage to win its goal – to take over Volkswagen.

From the year 2005, Porsche began increasing its share in Volkswagen, and by September 2008, it had acquired 35.14% of Volkswagen. This was said to be done so, to win over the so-called VW Law. The law was brought into place to prevent a hostile takeover of Volkswagen. This meant that any company trying to buy Volkswagen needed atleast 80% majority of the shares. This gives the German state government of Lower Saxony a share of 20.1%, a blocking majority.

In October 2008, Porsche announced that it had increased its stake in VW to 42.6%, and held cash settled options on a further 31.5%, which meant that it had over 74.1% shares of Volkswagen.

Porsche built up its holdings by using cash settled options (These call options basically give the buyer the option to buy shares at a competitive price at a future fixed date). Porsche were able to make the most out of this.

*Reference -bbc.com by Emily Hughles – [Online] available from <http://news.bbc.co.uk/1/hi/business/7843262.stm,>

* Image – [Online] available from <http://www.auto-types.com/autonews/volkswagen-buys-half-of-porsche-5742.html&gt;