Bloomberg
Porsche 911, Boxster Sales Plunge as Buyers Await New Models
By Jeremy Van Loon
March 1 (Bloomberg) -- Gery Mannes, a fixed-income trader at
the Bank of New York Co. in Brussels, is selling his Porsche AG
Boxster sports car and doesn't plan to buy another until the 73-
year-old automaker brings out a new version.
The Boxster, now in its eighth year of production, is
``old,'' said Mannes, 29, who's considering buying a Porsche
Cayenne sport-utility vehicle.
Sales of the Boxster and the 7-year-old 911 sports car, the
automaker's flagship model, fell 38 percent in North America in
January as the cars reached the end of their lifecycles, making
Stuttgart, Germany-based Porsche increasingly dependant on the
Cayenne. The model, at a base price of 47,592 euros ($59,400),
accounted for 60 percent of sales in the region in January.
With one dominant model, ``the risk of becoming dependant on
the Cayenne becomes immensely high,'' Michael Punzet, an analyst
at Landesbank Rheinland-Pfalz, said. ``The company would be
vulnerable if something were to hurt demand.''
Porsche won't show new models at this week's Geneva car show,
where other carmakers are introducing designs and prototypes, and
it won't hold a press conference, Manfred Ayasse, a spokesman,
said. The company is ``looking at'' how to cut dependence on the
Cayenne, Chief Executive Officer Wendelin Wiedeking, 51, said at
the annual meeting in January.
``For Porsche, new models are very, very important because
they are such a small-volume producer,'' said Susan Levermann, a
fund manager at DWS Investment, which oversees the equivalent of
$149 billion, including 130,000 Porsche preferred shares.
Wiedeking didn't give details of plans for models at the
annual meeting and he wasn't available today to elaborate, Sylvia
Stadelmann, a spokeswoman, said.
Profit
Porsche today said net income for the six months ended Jan.
31 rose 17 percent to 119.6 million euros. Profit missed the 134.5
million-euro median forecast of analysts in January.
DWS cut its holding in Porsche by half after the carmaker's
preliminary fiscal first-half earnings figures published in
January rose less than expected, and ``at the moment we don't know
where the upside is,'' Levermann said.
Porsche shares are down 14 percent from a high of 546 euros
in March 2002. The stock today rose as much as 6.62 euros, or 1.4
percent, to 474.98 euros and was up 0.7 percent at 471.50 euros as
of 1:26 p.m. in Frankfurt.
The 911 was rolled out at the 1963 Frankfurt International
Motor Show to follow up the 356, Porsche's first sports car.
911's Versions
The carmaker has produced four 911 versions. The original was
built until 1973, followed by the G-Series, whose 1973-to-1989
production run was the model's longest. Today's version, dubbed
the 996, was introduced in 1997.
``Customers were disappointed with the current 911 model
because many thought it looks too much like the Boxster'' which
costs about half the price, said Michael Raab, an analyst at Sal
Oppenheim.
``It could also be tough going with a new Boxster model
because it will probably be 90 to 95 percent similar to the
current one,'' said Raab, who expects a ``significant'' reduction
in Porsche's 2004 sports car sales.
The Boxster's development was initiated by Wiedeking to
expand Porsche's brand to become more affordable. It was meant as
a throwback to the 356, the car actor James Dean was driving when
he died in a crash in 1955. The model sells for 42,256 euros. The
911 starts at 74,504 euros.
The Boxster competes against Bayerische Motoren Werke AG's
Z4, DaimlerChrysler AG's Mercedes SLK and Volkswagen's Audi TT.
The 911 is up against the Aston Martin DB9, the Ferrari 456M and
the Mercedes SL-Class.
Engines
``You get a lot more bang for your buck with the Z4,'' Sal
Oppenheim's Raab said. ``One reason a customer chooses a Porsche
is for the engine power. Both Mercedes and BMW are sprucing up
engines in the Z4 and SLK.''
Except for making tractors after World War II, Porsche only
built sport cars until the Cayenne. Wiedeking opted to develop the
sport-utility vehicle because some Porsche drivers already owned
one built by competitors, such as Mercedes's M-Class or BMW's X5.
The Cayenne went into production at a new factory in Leipzig,
Germany, in 2002.
The company expects the Cayenne to help raise profit a 10th
consecutive year and boost vehicle sales to more than 75,000 units
annually from 54,234 vehicles in fiscal 2002. The Cayenne, which
went on sale in Germany in December 2002, cost 511 million euros
to develop, including building the 300-employee factory.
``The Cayenne will more than compensate for the weaknesses of
the Boxster and the 911 this year,'' said Trudbert Merkel, who
helps manage 5 billion euros at Deka Investment in Frankfurt and
owns Porsche shares. ``The real question is when the model is
fully introduced and they don't have the effect anymore, whether
an upgraded 911 will keep growth going.''
Recall
Porsche is recalling 10,637 Cayennes in the U.S. to fix a
wiring flaw that could spark an electrical fire, the U.S. National
Highway Traffic Safety Administration said Thursday on its Web
site. The carmaker will notify owners of 2003 and 2004 Cayenne S
models to go to dealerships for repairs.
Porsche remains convinced Cayenne sales aren't taking away
customers from the sports cars because ``a Cayenne buyer is
different from someone who buys a 911,'' Wiedeking said at the
annual meeting.
?
I hope the God it's not true.
at least for now I don't know about tomorrow though 
.
