By on August 20, 2009

A BlueSport-based sub-Boxster? A “Roxster” Cute Ute based on the Tiguan? A Panamera coupe? VW CEO Martin Winterkorn’s interview with Manager Magazin is sure to make Porsche purists sweat. Sure, he says “a Porsche must remain a Porsche.” But how else does Winterkorn expect the Zuffenhausen boys to sell 150k units per year by 2012, let alone 200k by 2018? Just as a reminder, Porsche currently sells about 75k units per year, Cayennes and all. But, as Winterkorn modestly asks, “who plays the multi-brand game better than us?” Yikes!

Get the latest TTAC e-Newsletter!

Recommended

27 Comments on “Winterkorn: Porsche Needs to Pump Up the Volume...”


  • avatar
    jmo

    So… under the VW umbrella they have Lambo, Bentley, Bugatti, Porsche, Audi, VW, Seat, Skoda… have I missed any?

    So, what are the chances that the next generation Panamera will be based on the same platform and engines as the Bentley, A8 and Pheaton? The Cayenne, Q7 and Toureag are already on the same platform with the same engines.

    Will platform be shared between the new lower end Bugatti, Bentley, Porsche, and Audi R8? I mean the R8 and the 911 are both rear engined – seems a shame to bevelope two seperate platforms…..

    Dangerous… very very dangerous.

  • avatar
    rnc

    Porsche will continue to be Porsche, the Porsche family (not including the Piech clan), own +20% of VW, enough to block any major decisions. In some ways by defeating the Wiedeking takeover of VW, Piech has lost control of VW.

  • avatar
    midelectric

    The circle is completed!
    How long before the underpinnings of the people’s car once again serve as the basis for Germany’s finest sporting machines?

  • avatar
    AKM

    Now if the next new beetle was based on a 911 platform, we’d be talking business!

  • avatar
    superbadd75

    How long before the underpinnings of the people’s car once again serve as the basis for Germany’s finest sporting machines?

    If that holds true, I suppose we will have a FWD Golf-based entry level VW.

  • avatar
    James2

    Porsche. There is no substitute.

    (Um, actually, there is… lowers voice… down at the VW store.)

  • avatar
    thanh_n

    It sounds like GM in the making. Next thing you know, VW could possibly begin badge engineering their high-end cars. I hope not.

  • avatar
    jmo

    “VW could possibly begin badge engineering their high-end cars. I hope not.”

    It’s the commonality between the Bentley Continetal, Audi A8 W12 and Pheaton W12 that stikes me, they are all very similar – engines, transmissions, all wheel drive systems, etc.

  • avatar
    bleach

    Maybe I’m missing something but if you want more volume, why pump volume at Porshe over VW, Seat and the rest? If all he wants is to share platforms and reduce development costs I can’t see the Jaguar X-type approach working.

  • avatar
    Vega

    People need to wake up from their brand purity dreams. Increased regulation and technological progress have pushed the critical mass needed to pay for crucial automotive developments further and further up. Because of this effect, some analysts have even begun to doubt the long-term viability of medium-sized manufacturers like Daimler. Keeping Porsche platforms completely independent is not possible under these circumstances. And if you look at the company’s history, without using a mass-market technological platform the company Porsche would have never seen the light of day in the first place.

    I believe the Winterkorn quote has some truth in it. Under the VW umbrella, Audi developed from a dead brand to a viable competitor in the premium market segment. Skoda was nowhere 15 years ago, and is now quite successful in fending of the more lucrative end of the European low cost competition. While Seat ion the other hand is nothing to boast about, VW’s track record in brand management is certainly more successful than Ford’s or GM’s.

    BTW., only the 911 is rear engined. R8 has the engine between the axles. In my view the R8 is a brilliant example of successful platform sharing, extending the Gallardo platform “downmarket” without doing much damage to Lamborghini.

  • avatar
    wsn

    Vega, you are right about a platform must sell in quantities to be viable. However, your comment didn’t answer the question about brand overlap.

    In other words, we both recognize the need that Porsche use VW’s mass market parts. But What’s the difference between Porsche and Audi? Previously, Porsche is more sporty and upscale. But no more. How many here honestly think a Cayman S is better than an R8? Cayenne better than Q7?

    So, even if it’s OK to share platforms, VW group still have too many brands. It only needs VW + Porsche and you are pretty much covered from $10k to $300k. Audi, SEAT and Skoda don’t need to exist.

  • avatar
    kowsnofskia

    wsn, don’t forget that this is the same conglomerate whose core brand (VW) keeps thinking it needs to compete with its upscale brand (Audi) by producing baffling models like the Phaeton.

    And I also agree that the VW group has too many brands, although many of them are European nameplates that may have some worthwhile niche markets there that we’re not aware of.

  • avatar
    Vega

    As the Phaeton has shown, you need a viable luxury brand.No one buys 80k car with a VW badge on it. Even Toyota knows that. Audi is there to get the upper frosting of every market segment, e.g even in the compact class the A3 is fighting against the 1 series while the Golf dukes it out with the Focus, 307, Megane and Astra. As the numbers show, this works very well. Skoda is positioned against cheap Korean imports and is doing very well in that segment. For Seat I’m not very hopeful.

    Theoretically, Porsche would fit nicely as the provider of sports cars, however if a smaller Cayenne fits this strategy is doubtful, I agree. A smaller Roadster however could build on a strong brand heritage (356 speedster etc.).

    The R8 is mainly a technological showcase, a halo car for Audi (think M1 BMW). I don’t think it really hurts 911 sales and pobably didn’t cost too much to develop, and it helps pay for the development cost of the Gallardo platform. Would it have been built if Porsche had been part of VW 5 years ago? Doubtful.

  • avatar
    jmo

    No one buys 80k car with a VW badge on it. Even Toyota knows that.

    May I present to you the one, the only, the hand built 12-cylinder Toyota.

    http://en.wikipedia.org/wiki/Toyota_Century

  • avatar
    folkdancer

    Thank you jmo. That wikipedia article on the Toyota Century was fun to read.

  • avatar
    1600 MKII

    All you have to do is go to the EU and see the proliferation of Skodas and SEATs to realize there seems to be room for a lot of brands…I don’t think Weiderkorn is dumb enough to change the core Porsche brand…but there is only so much technology out there. I suspect we’ll see a lot more experimentation with drive trains and “motors” in the lower range and continued competition between the Lambos and Porsches. Audi has it’s own niche and so does Bentley and they’ve got their own competition outside of the “family.”
    Now – as to 150k units? HA!

  • avatar
    Kristjan Ambroz

    There are plenty of VW parts in Porsches already – the HVAC on the first generation Boxter and the 996 were old Audi 100 items, I know VW Polo rear view mirrors have been used for a long time (the internal one, not the external ones), and there is plenty more of that going on already. As for engines, there is sufficient volume to allow Porsche to remain independent in that department – the VW Group does have a massive problem of offering too many engines in each displacement / power categories already and many are being produced either in lower volumes, or at much lower profit margins than most of the current Porsche units.

  • avatar
    rnc

    Skoda is a czeck and Seat is a Spanish. Both countries have loyal populations (think Renault and France). In terms of market people seem to confuse the EU with the US, they aren’t 50 states that think of themselves as a whole they are a collection of different countries, in most cases the local population will buy from a local manufacturer all other things being equal, under this premise the multiple brands make sense and work for VW (they are in reality VW platforms and components, the factories can turn out all three on the same assembly line).

  • avatar
    PaulieWalnut

    rnc:

    You’re right about national loyalties with car manufacturers but SEAT are in real trouble. They’re being squeezed out of the market. Why buy a seat when you can have a cheaper Skoda or a VW with it’s superior re-sale value?

    Falling sales reflects this problem.

  • avatar
    psarhjinian

    All you have to do is go to the EU and see the proliferation of Skodas and SEATs to realize there seems to be room for a lot of brands

    Well, yes and no. These brands sell for much the same reason Pontiac, Buick and GMC do: the dealers exist to move the product. The questions are whether or not VW makes money on these cars or not, if they make as much as the competition, and if things will continue as-is.

    My bets are “yes”, “no”, and “certainly not”.

    Here’s the problem: GM couldn’t make money on four brands at a higher market share in North America. VW does this a bit better, but it still has to pay the maintenance costs of designing and marketing four** overlapping brands (Audi—yes, they do overlap—VW, SEAT and Skoda) while it’s competition only needs to concern itself with one. If you have huge volumes, you can minimize this problem, which is what GM was able to do for a long time.

    Problems crop up when you have brands effectively stealing sales from each other. Let’s say you have four dealers in the same town: VW, Audi, Skoda and SEAT, as well as two non-VW dealers: say Ford and Toyota. For all those brands, the entry-level cars are the volume sellers. Every Golf is a lost sale for the other three brands; every Focus or Corolla/Auris is even worse. VW has effectively spent four times the marketing and design money per market segment, and that’s money that could be spent making the car better and/or keeping costs down. And one of those four brands is going lose (currently, that’s SEAT), which drags things down further.

    You can make the argument that buyers want sport, or style or are loyal to a given nameplate and that is true, to a degree. But modern cars are now so good at everything and regional barriers are much weaker, and thusly this argument is much weaker than it used to be. SEAT is ostensibly sporty and appeals to Iberian buyers, but it sells nothing that VW or Audi doesn’t offer, save for the tortured sheetmetal–and thusly SEAT is not doing well. Tossing them a refried Audi A4 is not the solution, any more than GM tossing Opels and Holdens to Saturn, Buick and Pontiac was.

    Skoda could eventually face the same fate: there’s next to no difference betweem Skodas and VWs, and they’re not relevant now that eastern Europe is looking less and less economically distinct. Unless VW deliberately makes Skodas into decontented VWs (which would be a bad idea for different reasons) they have no reason to exist and will likely be facing SEAT’s problems.

    This problem is oh-so-much-worse with Porsche. With commodity brands you have the excuse that buyers don’t care about platforms and heritage; that’s not so in this market. If Porsche starts looking like a platform cost-amortization exercise for Audi or Lamborghini, it’s buyers will notice, and Porsche will suffer the same brand-weakening that has nearly killed Cadillac, combined with the overlap costs.

    What VW ought to do, if they had more brains and less ego, would be to cut Porsche down to the 911 and Cayman/Boxster only. As a member of the VW group, they no longer need to artificially push volume (and Audi no longer needs the R8); they could, instead, aggregate the four brands into a single marketing and dealer structure: think combined Bentley/Porsche, Audi/Bentley/Porsche or Lambo/Bugatti dealers.

    This would require a serious paradigm shift in German automotive circles: they’re currently obsessed with filling every niche (lest their competitors grab the six or seven people interested in things like the X6 or R-Class) and engaging in engineering cock-fighting exercises. I personally don’t think they’re capable of turning down the echo chamber and doing it.

    ** I’m excluding the lux brands like Bentley, Lambo and Bugatti as the volume is negligible and margins obscene

  • avatar
    wsn

    psarhjinian, I think they should go one step further:

    Just drop Bentley, Lambo and Bugatti. People just gave these brands more credit than they deserve. Remember, these are dead brands that don’t make money even after the huge cash infusion.

    Instead, just use the Porsche nameplate (which itself is the only growing exotic brand in the world, maybe except Ferrari) to fill those market niches.

    I just can’t understand these Germans. Why would they market some failed foreign brands as being higher up than their own very successful domestic brand?! They need to learn from Toyota. Don’t buy those crap, just build your own better.

    So, just build $10k~$40k VWs and $40k~$200k Porsches and drop everything else. If there is a niche for Skoda, that means VW is not good enough as compared to competitors.

  • avatar
    psarhjinian

    Why would they market some failed foreign brands as being higher up than their own very successful domestic brand?!

    Ego.

    Remember that these guys have been fed nothing but news of how great they are for the past decade and look only to each other, or internally, for cues.

    If BMW buys Rolls, Mercedes and VW must have counterpoints. If Mercedes sells a four-door coupe, BMW and Audi must sell more. It’s constant, myopic one-upmanship of the type that nearly (and may yet have) killed GM, Chrysler and Ford.

    The difference is that the competition is that much hotter, and that the products more or less are quite good. The end result is still the same: one or more of them is going to bite the dust, and all three are going to ignore the threat that the Asians (who don’t seem as prone to this kind of ego slapfest) pose.

    The biggest beneficiary of the constant brand-sullying, quality-killing one-upmanship has been Toyota/Lexus. Had Mercedes not gone off the deep end, there’s no way Lexus would have gotten traction; that BMW is similarly in danger of letting Nissan/Infiniti to the same thing to it is telling.

  • avatar
    rnc

    Just drop Bentley, Lambo and Bugatti. People just gave these brands more credit than they deserve. Remember, these are dead brands that don’t make money even after the huge cash infusion.

    Anything to back this up? Financials, etc.?

    From my understanding VW has made Bentley hugely profitable (on the margin side), even more so than RR. There is a harvard case study on the Audi/lambo (who actually owns Lambo) merger (that everyone laughed at). To make it short, Audi learned performance and design and Lambo learned quality and both brands have never been more popular or profitable. Bugatti, technology demonstrator/developer that actually pays for itself and trickles down to the rest of your lineup (i.e. Porsche 959).

  • avatar
    wsn

    From my understanding VW has made Bentley hugely profitable (on the margin side), even more so than RR.

    Did RR ever make money in the past 50 years? That’s not a great target to begin with. VW group is valued at several dozen billion dollars. The CEO should not divert his attention to a brand that can make $10M in a good year. Not to mention Bugatti is a complete money sink hole.

    The goal of a VW CEO should be to make its premium brand as profitable as Porsche (before takeover) or Lexus.


    There is a harvard case study on the Audi/lambo (who actually owns Lambo) merger (that everyone laughed at).

    Those same people who created the case study ran 3 of 5 American investment banks to the ground. 5, if there hasn’t been a federal bailout.

    If you want to learn, learn it from who did it right, like … Toyota.

  • avatar
    rnc

    If you want to learn, learn it from who did it right, like … Toyota.

    You’re argument is circularly based on this Toyota is great copy Toyota, your not copying Toyota you must not be doing it right.

    I imagine in the 60’s that would have said “If you want to learn, learn it from who did it right like…GM”

    Lets see Toyota is the same company that has 3 million cars/year in over capacity b/c they couldn’t see that the 16m/car market in the US wasn’t sustainable (they canned thier CEO for a reason). The same company that concentrated thier production in the US and Japan and missed the BRIC revolution.

    NEC made that mistake once, lets copy IBM just do it better and then well be better than IBM, and for a short time they were, and they were so focused on being more IBM than IBM that when the market (world) changed they missed it, IBM didn’t.

    Those same people who created the case study ran 3 of 5 American investment banks to the ground. 5, if there hasn’t been a federal bailout.

    You’re confusing the quality of the business school with the greed of the people who came out of it (there is a difference).

  • avatar
    wsn

    rnc :
    August 21st, 2009 at 1:37 pm

    You’re argument is circularly based on this Toyota is great copy Toyota, your not copying Toyota you must not be doing it right.
    ——————————————–

    I admit that Toyota or GM is not a good example. But look at the other side, which company made a lot of money by buying failed brands? Ford (AM, Jag, LR)? Not really.


    You’re confusing the quality of the business school with the greed of the people who came out of it (there is a difference).
    ——————————————-

    Everyone is greedy, including you and me. Business schools are there to teach greedy people to be smart greedy people that don’t end up holding the bag at the end. If the graduates failed so brutally, the schools also failed. As of right now, I don’t think Harvard or Yale business schools are good in teaching economic principles. If there is any value left in these schools, they provide the training and connections for a career in lobbying.

  • avatar
    agenthex

    The end result is still the same: one or more of them is going to bite the dust, and all three are going to ignore the threat that the Asians (who don’t seem as prone to this kind of ego slapfest) pose.

    They seem to be doing fine, it’s the asians (especially the japanese) who pigeonholed themselves in the US. Hell, they’re even positioned perfectly for when americans inevitably downsize their cars, if only they can make their cars reliable.

    So, just build $10k~$40k VWs and $40k~$200k Porsches and drop everything else.

    Prestige and image matters. That’s why even toyota created lexus, but are still considered one rung down on the ladder.

    The halo effect works when applied properly, regardless of whether you purposely choose to ignore it.

    If the graduates failed so brutally, the schools also failed.

    The graduates didn’t fail at all, most are rich; it’s the rest of us who got fuucked.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Seth Parks, United States
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Moderators

  • Adam Tonge, United States
  • Kyree Williams, United States