No Truck With Porsche

First, the good news: the Porsche Cayenne is a hit. Since its release up to this July, American dealers have flogged 6350 Cayennes. The SUV's sales have lifted turnover in Porsche's key market by 15%. With the introduction of a cheaper, six-cylinder Cayenne (sans S) in '04, Stuttgart's SUV business should continue to grow apace.

Now the bad news: the Porsche Cayenne is a hit. The increase masks a 21% sales drop for 911s and Boxsters. Bottom line: the Porsche Cayenne has transformed the world's pre-eminent sports car manufacturer into a truck maker with an ailing sports car business attached.

Porschefiles will clock the figures and predict doom and gloom (while things go boom) in Weidiking's lab. Of course, these are the same tragedians who threatened to gouge out their eyes when the 911's engine switched from air to water cooling. So the fact that the price of privately held Porsche preferred stock sank 17% this year is perhaps a better indication that there's something rotten in the state of Baden-Württemberg. After all, this is the same car maker that recently boasted the world's highest per vehicle profit margin.

If Porsche can still lay claim to that title, it won't be able to do so for long. There's a 60-day inventory of unsold Cayenne's waiting for winter on dealer lots. Two thousand dollar discounts are common. Common sense suggests the discounts will get deeper before the first flake falls. What's more, US dealers are offering money off the MSRP of all Porsches. Provided you're prepared to buy your new Porker as is, you can walk into an authorized dealer and buy a brand new 911 C4S for $5k under sticker. Ditto the Boxster S. A new Boxster will take a $4k hit, easy. And that's just for starters.

Clever readers will note the proviso: "as is". Porsche customers are particular people. They don't want a C4S. They want a Midnight Blue C4S with Savannah Beige leather, Turbo Look wheels, sports exhaust, carbon fiber door sills and a light wood/aluminum gear shift knob. Porsche dealers have always specced-up cars without buyers, but the majority of their sales have traditionally come from loyal customers who want their 911 or Boxster just so— and are happy to pay full whack for the privilege. This helps explain the excess Cayenne inventory…

Early press reviews slated the $56k base Cayenne's steel spring suspension as unrelentingly harsh. There were two ways around the problem: spend an additional $33k for an air sprung Turbo (retail $89,000) or pony up another $3200 for an S with air suspension. Unsurprisingly, the majority of Porsche's product-savvy customers signed up for an air-sprung S. As a result, the supplier ran out; you can't order an S with air suspension until further notice. Dealers are stuck with a burgeoning inventory of steel-sprung Cayennes.

Hello? Why didn't Porsche build all Cayennes with the [clearly superior] air suspension in the first place? And once they detected the problem, why didn't they stop making steel sprung models? More fundamentally, why didn't Porsche avoid all that air suspension, variable ride height, locking diff, three shock absorber setting, off-road crap from the start? Why didn't they just build a sexy truck that could blast down a public road like a 911?

There's cause for concern. The Cayenne is fighting for sales in America's most competitive market. Its rivals have a lot more money to invest in R&D, and they're about to unleash a flotilla of refreshed products. As the faster Infiniti FX45 proves, the Cayenne is in real danger of losing the main advantages separating it from the herd (and built Porsche's reputation): superior on-road dynamics. Although Porsche's brand cachet is still hard to beat, it's not impossible. Ask Mercedes or BMW. Their AMG and M-Power models have been chipping away at Porsche's "everyday supercar" title for years.

In fact, the days when Porsche's products were in a league of its own are long gone. The Honda S2000, Audi TT, Nissan 350Z and re-invigorated Mercedes SLK are all serious Boxster bashers. Mercedes SLR and Bentley's GT pose a direct challenge Porsche's forthcoming halo-mobile, the Carrera GT. Reviewers rate the Audeified Lamborghini Gallardo a better daily driver than the 911. It's a demented proposition, but the truth remains: Porsche has never faced so many worthy competitors on so many fronts at the same time.

When Porsche decided to build a truck, they claimed the digression was designed to generate cash to protect their core (read: sports car) business. The true believers know the company can regain its sports car dominance. May we suggest using Cayenne cash to build a faster, sexier Boxster; a V8-powered Carrera, a four-door Carrera or a new, entry level sports car? Please? For now, despite anticipated earnings of $35.20 per share, despite nine consecutive years of profits, shareholders and Porsche fans are asking the same question about the Cayenne: is it too little too late? Or too much?