Thought you folks might be interested in the press piece I wrote for a U.S. Porsche magazine. Remember that it is written for a biased Porsche audience...
Can Porsche Survive the Winds of its own Change?
Geneva Auto Show, March 7, 2017
I had worked my way through the press crowd and was just inches from the black-draped shape onstage. I knew that Porsche’s new Panamera Sport Turismo lay under that shroud, and I wanted to be excited. But I wasn’t. I was uneasy, apprehensive. The shape was one I had never seen on a Porsche stand throughout my fifteen years of international auto shows. It looked immense, misshapen, snake like in the front but bulky in the rear. A chill breeze whiffed down the back of my neck.
Was I about to see, dare I say it, a Porsche station wagon?
Now I am not against station wagons. I grew up in the 1950s and 60s, and wagons were the thing. Immense, two-toned/ wood-sided Buicks, Pontiacs, Chryslers, Fords, and Chevrolets conveyed American families comfortably from grocery stores to Yellowstone Park. But those colorful behemoths went extinct decades ago, trampled by endless herds of SUVs and minivans. Nostalgic images blended with the shape onstage and rendered it strange, out of place, a retro change for the worst.
Then Porsche’s CEO Oliver Blume welcomed the crowd and immediately announced that Porsche had sold a record 238,000 cars worldwide in 2016. In one year, 238,000 cars! I remembered that in 1992, Porsche had sold fewer than 24,000 cars—virtually all 911s. Now, just over two decades later, it was selling almost 10 times that number with five different models and countless variants. That amounts to an over 1000% sales increase! I began to panic. Was this success or a desperate, hopeless effort to save an icon by probing into every tiny market niche? Rear engine sports cars, mid engine sports cars, SUVs, compact SUVs, luxury sedans, existing and planned hybrid supercars—and now a station wagon? What’s next, a Porsche pick up truck, van or Zip Car? In its headlong haste to produce more and more, will Porsche huff and puff and blow its own house down?
I did feel somewhat relieved when the drape was pulled back from the “station wagon”. The Sport Turismo is different for sure, but a well-designed different. Think three-fourths Panamera with a slightly less sloping rear section. All integrated nicely—no added on look. Maybe, to my old 50s and 60s eyes, still a station wagon, but an extremely sleek, modern, even futuristic one. And surely more practical than a Panamera—easier loading, more interior cargo space, three usable rear seats--but with the same acceleration and handling. Not Cayenne practical, but clearly less “boxy” and more sports car like. Porsche is testing the market for buyers somewhere between the Panamera and Cayenne, buyers who want practicality and sports car performance, and buyers who are willing to be seen in a rather unfamiliar (at least for now) body style.
My “Too much change going on here” concern was starting to move from “It’s not so bad”; to “ I kind of like it”; to “Porsche may have really hit on something here”. I was beginning to feel enthusiasm, even temptation. But the reporter in me couldn’t ignore the reality that too much change, too much volume, too many product lines can be darn risky business. Consider:
1. Rapid sales growth can indicate success, but also mask frantic internal pressure to expand and produce critical revenue at any cost.
2. In the U.S., Porsche and Audi now support its huge VW parent whose sales cannot possibly regain the 23 billion dollar settlement lost from the emissions tampering scandal. Small tails are wagging an extremely large dog.
3. Porsche is a niche luxury brand whose products are considered by many (including loyal customers) as too expensive. Luxury product sales are notoriously vulnerable to economic downturns.
4. In the changing world of urban transportation, where customers are showing increased interest in fuel efficient, hybrid, electric and even autonomous driving vehicles, Porsche’s emphasis on performance and race-based engineering may become more and more irrelevant. (Porsche of course has hybrid vehicles, but cost remains a challenge for urban consumers with changing product preferences).
I pondered these “winds of change” over the days following the Geneva Show. Are the winds the gentle, persistent breezes of necessary competition, the pressures on any automobile manufacturer to produce desirable products at a profit? Or are these winds the turbulent storms of a manufacturer with poor navigation skills and unreachable destinations? I would be arrogant to predict the answer, but I can rely on Porsche’s past decisions and some of my own instincts.
Inarguably, Porsche has steered a steady and successful course over the years. The courageous decisions to produce the Boxster, Cayenne, Cayman and Panamera models have been well planned and executed. The continued commitment to racing and engineering shows understanding of the brand’s true values. The ongoing focus on new technologies, hybrid and otherwise, demonstrates the ability to take risks and invest in uncertain future markets. And Porsche certainly should get credit for its attentiveness to customer preferences—witness the offering of an optional manual gearbox in the exciting new GT3 which shared the stage with the Sport Turismo in Geneva.
And my instincts? I am glad I am not a Porsche executive trying to read which way the winds will blow over the next few years. I would probably just button my squall gear and huddle down until it all blew over. But I am glad to be a Porsche customer watching the gale forces, knowing the ship will likely sail safely through rough seas. And I will also admit that Porsche’s newest vessel—even if it's not aqua blue and white with wood sides-- is really beginning to catch my eye…