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    Cayenne Sales Sink



    DIANA T. KURYLKO | Automotive News

    Posted Date: 11/21/05

    Less than three years since its U.S. debut, the Porsche Cayenne has run out of steam with sales here slumping for the 10th month in a row.

    The Cayenne's decline again raises the question of whether Porsche stretched the brand too much with an SUV -- particularly a vehicle with below-average quality scores.

    U.S. sales of rival luxury SUVs also are down, leading some dealers and Porsche executives to conclude that the Cayenne is a victim of gasoline prices and the economy. Cayenne sales for the first 10 months of 2005 were 10,907, down 26.5 percent from a year earlier.

    Indeed, the Volkswagen Touareg SUV, with which the Cayenne shares a platform and many components, is performing worse than the Cayenne. U.S. Touareg sales are down even more -- 36.9 percent through October.

    Other dealers say the Cayenne reached its peak when sales hit 2,075 units in October 2004. They say it's a fashion-statement vehicle that doesn't command the loyalty that Porsche's sports cars do.
    The Cayenne isn't due for a facelift until 2007.

    Some decline expected

    Peter Schwarzenbauer, CEO of Porsche Cars North America, says the Cayenne is a success. With the SUV in its third year, Porsche expected a decline between 10 and 15 percent compared with 2004, he says.

    Schwarzenbauer says sales are down more than expected because of high gasoline prices and wobbly consumer confidence.

    Unlike the competition, Porsche won't offer cash incentives on its SUV. Considering this, Schwarzenbauer says, "the Cayenne is still doing OK."

    Porsche isn't putting on incentives, but dealers are. Art Spinella, president of CNW Marketing Research Inc. in Bandon, Ore., estimates that the average dealer incentive on the Cayenne is between $3,000 and $4,000.

    Todd Turner, president of Car Concepts Inc., an automotive consulting company in Thousand Oaks, Calif., says Porsche never should have made an SUV. "It is a me-too vehicle and doesn't fit the brand at all," he says.

    But image isn't the Cayenne's biggest problem. Turner says Porsche still hasn't ironed out the Cayenne's quality problems.

    "There are problems with electrical bits, pieces not connected tight enough and cooling problems," he says. "Look at a 1-year-old Cayenne, and it looks used. The fit and finish isn't there."

    Porsche says its initial quality numbers for October from J.D. Power and Associates show 163 problems per 100 vehicles for the Cayenne, compared with 223 in October 2004 and 233 in October 2003. J.D. Power publicly releases initial quality results once a year and this May said the industry average was 118 problems per 100 vehicles.

    By contrast, Porsche's Boxster sports car had 94 problems per 100 vehicles in October, and the 911 sports car had 87 problems.

    High gasoline prices sent the sales of many SUVs spiraling downward in the past few months. Cayenne sales fell 46.8 percent in October, compared with a year earlier.

    Down, down, down

    October was a disastrous month for nearly every brand. But Cayenne sales have been down every month this year, falling at least 20 percent most months compared with a year earlier.

    Jerry Nelson, owner of Schneider + Nelson Porsche in West Long Branch, N.J., says unlike Porsche's sports car buyers, "customers who come off-lease of an SUV don't have a great deal of loyalty and move around to whatever is new on the block.

    "Cayenne was the hottest thing a few years ago. Now it's whatever else is new. And we don't have a facelift on it yet."

    Schwarzenbauer says it's too early to tell whether lessees will go into a second Cayenne because most haven't come off their three-year contract.

    He says that initial data show that between 40 and 45 percent lease another Cayenne -- the same rate as the sports cars.

    Jim Hall, an analyst with AutoPacific in Southfield, Mich., agrees that luxury SUV buyers aren't loyal, but he doesn't fault Porsche for wanting to attract buyers looking for a bigger vehicle.

    Referring to the four-door Panamera sedan Porsche has approved for production in 2009, Hall says, "in retrospect, the sedan looks like a better choice."

    Re: Cayenne Sales Sink

    Porsche sport car sales will suffer as well. The allure of buying a Porsche has been emasculated as a result of over production and introduction of several look alike models.

    Re: Cayenne Sales Sink

    Nahhhhh. The Cayenne just doesnt look fresh anymore and its gone in and out of style for those buyers who shop for the latest cool SUV. Look at Hummer H3 sales, the factory is adding a third shift to meet demand. The H3 will be hot for awhile and then the next lucky model will appear from company X and take its place at the SUV trough.

    Porsche sports car sales have a world of their own. When the stock market or housing sales are up, Porsche sales are up, when they cool off, Porsche sales go down. Its the nature of the Porsche sports car sales beast.

    Re: Cayenne Sales Sink

    Porsche must be happy that 430's can not be had for MSRP or they would loose another group of buyers .

    Re: Cayenne Sales Sink

    Its all about the new Range Rover Sport. In my opinion much better value for money.

    Re: Cayenne Sales Sink

    Raced one today, no contest against my S. There is a big difference between making something to "look" fast and actually doing it.

    Re: Cayenne Sales Sink

    Quote:
    OCEAN said:
    Porsche must be happy that 430's can not be had for MSRP or they would loose another group of buyers .



    In the US maybe. Over here in Europe, you can have a F430 within 6 months, a Spider within one year and with some "contacts" even much earlier. At MSRP. For a little premium, you can have both models at once, some F430 (not Spider) are already available even without premium.

    Ferrari and Porsche buyers are NOT the same group of buyers, especially not in Europe where envy issues play a much bigger role than in the US.

    Regarding the Cayenne: the Cayenne looks outdated, already. Porsche wanted to create a timeless design but they still have to learn that there is only ONE Porsche which is accepted for it's timeless design: the 911. All other Porsche models can have any design Porsche desires, they will sell for some time. The Cayenne design was boring from the start, I listened to many sales attempts and talked to many interested customers and either they like it from the start (like older couples or people who just want to drive a Porsche, no matter how it looks) or they hate it. I hated the Cayenne design from the start, I like the Turbo front but that's it. The rear is boring, the side view is horrible and the front (non-Turbo) is plain ugly, sorry. The Cayenne design doesn't look clean, it reminds me of the design of the first 996, a mix of everything. I think that the next Cayenne generation (not facelift!) will look much better and more Porsche-like. Again Porsche failed to step over their own courage, sad.

    Porsche planned selling 10000-15000 Cayenne per year. They sold much more. As long as the sales figures don't drop below these figures, Porsche doesn't really have to worry. And one thing is clear: Porsche doesn't want to build right now over 100000-120000 cars per year. So they're happy to have a "healtyh" model mix to reach this number and I suppose this would not be a problem.
    In my opinion, the introduction of the Panamera is the most important model introduction for Porsche for decades, not even close to the Cayenne introduction.
    Because the Panamera is supposed to "penetrate" a very very important market, the market of the very important luxury limousines. If Porsche succeeds to penetrate this market, longtime success will be guaranteed.
    The Cayenne is still important but not that important like people may believe. Don't forget Volkswagen and the Touareg and all the synergy effects from the parallel production, not to speak about the advantages of using VW suppliers and parts.

    But of course people like Nick are always looking for the fly in the soup, otherwise they aren't happy.

    Re: Cayenne Sales Sink

    RC, you made a clever analysis that a car company can only really have one Icon at a time. In Porsches case its the 911, their other cars have some "Porscheness" in them, like speed feel, low center of gravity, weight transfer etc., but its the 911 that has the special magic.

    Re: Cayenne Sales Sink

    I don't think that cayenne is outdated, because I have seen one more yesterday ( OK, it was a Turbo ) and it's still a beautiful car in my opinion. Maybe they can make the front a little bit more big and aggressive, but unfortunately it's seems to be less big with the facelift. I don't like cars with a front that plunge to the ground. I like cars with massive front and the Cayenne turbo have already a good front. For the normal cayenne you're right, but I have never plan to buy a normal one. And I like also the rear and the side. But the more beautiful is the aluminium on the door.

    That's my humble opinions.

    Re: Cayenne Sales Sink

    I tend to agree, the base Cayenne (S) is simply ugly. That front bumper is just an eyesore and the eyes look out of proportion.

    Porsche should have stuck with the Turbo model and never introduced those inferior models. The S I can fathom - but the non - S is simply a disgrace to the name and heritage.


    Nonetheless, the Cayenne has still been an astonishing success story. No one can dispute that.

    Re: Cayenne Sales Sink

    They better do more than a facelift or they may really loose the SUV market they have .... I agree the car is dated looking and new headlights are not going to cut it .

    Re: Cayenne Sales Sink

    Quote:
    OCEAN said:
    They better do more than a facelift or they may really loose the SUV market they have .... I agree the car is dated looking and new headlights are not going to cut it .



    The Cayenne still sells better than any other Porsche model, maybe you guys seem to ignore that.

    Re: Cayenne Sales Sink

    Lets just say the Cayenne V6 is sold out here in kuwait for MY06, the S has some available but not much. The turbo on the other hand is WIDELY available.

    Re: Cayenne Sales Sink

    Quote:
    Fireo said:
    Lets just say the Cayenne V6 is sold out here in kuwait for MY06, the S has some available but not much. The turbo on the other hand is WIDELY available.



    Over here, you can have them all pretty fast. I may be mistaken but I think my dealer has two V6 in his showroom and another new V8 in his stock. The Turbo is also widely available for fast delivery. Surprisingly, powerkit equipped Turbos seem to sell pretty well over here.

    Re: Cayenne Sales Sink


    Cayenne sales are sinking in the US -25.5% YTD (10 month) ..... but I'm afraid the US is not the world.

    - During the past fiscal year (August 04 to July 05), Worldwide sales (deliveries to clients) were up 5% to 41,884 units (vs 39,913) while North American (US+Canada) were down 4% to 16,832 units (vs 17,455). This means that other regions of the world were up. We don't have yet the breakdown between Europe and RoW but we can fairly assume that sales were also down in Europe. Therefore RoW sales are very strong and are more than compensating for weak sales in Europe and North America.

    Keep in mind that in "new" markets for Porsche like the Middle East, India, China, Russia, and Latin America the Cayenne is THE best seller with over 2/3 of total sales. In those country, the sportcar segment is non existent while there is a clear demand for SUVs.

    Cayenne sales are clearly helping Porsche to diversify from its 2 core markets (North America & W. Europe) and to attract new buyers that otherwise would have never bought a Porsche Sportcar.

    The plan was to sell around 20,000 Cayennes per year, so as long as the mix remains high, Porsche will be happy even with fewer unit sales.

    As far as the Cayenne look is concerned, only time will tell. I'm not quite sure people were that enthusiast when the 911 was presented in 1963.

    Re: Cayenne Sales Sink

    Quote:

    In the US maybe. Over here in Europe, you can have a F430 within 6 months, a Spider within one year and with some "contacts" even much earlier. At MSRP. For a little premium, you can have both models at once, some F430 (not Spider) are already available even without premium.



    not quite true. dealer allocations have been slashed. if you order now, you'll have to wait for between 18 (berlinetta) and 24 months (spider).

    Re: Cayenne Sales Sink

    Quote:
    zzboba said:
    not quite true. dealer allocations have been slashed. if you order now, you'll have to wait for between 18 (berlinetta) and 24 months (spider).



    Depending on dealers perhaps? But maybe it changed over the past few months, you surely know better than I do, I didn't care too much about Ferrari in the past.

     
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