Every automaker is in this business to make money… there’s nothing surprising about that. But some are a little more focused on profits than others, and it should be equally unsurprising that Porsche is one of them. In an extensive interview with Automotive News Europe [sub], Porsche CEO Matthias Mueller gives a strong impression of how Porsche sees itself over the course of the first two questions:
What is your vision for Porsche in 2018?
Porsche is synonymous with sports cars – yesterday, today and doubtless tomorrow as well. In addition, in every other segment where we operate, such as with the Cayenne or Panamera, we always offer the sportiest vehicle. At the moment we are hard at work on our future strategy. And I promise you, it will contain a few exciting surprises.
What are your most important objectives?
We want to remain the world’s most profitable car manufacturer – and build on this position.
These are actually two separate goals altogether, and not two which necessarily go hand-in-hand. But if anyone can pull off the mix between performance and profit, it’s Porsche… and to understand how this strategy will play out in the near future, let’s take a look at Mueller’s product plans.
When asked about the greatest challenges facing Porsche’s product planning, Mueller notes
We will improve coordination between our model line product life cycles. Each year we want to celebrate a major event, namely bring a new Porsche to market. We are also revising and improving existing products and looking to see what would bolster Porsche’s image in terms of healthy growth.
By introducing a new “model” each year, Porsche keeps its hype-cycle rolling along without interruption from reliability studies, cynicism or challenges from competitors. The next big product to emerge from Zuffenhausen will be the next-generation 911 (991), and Porsche will make absolutely certain that this single model will sustain quite a few hype-cycles. How? Variants. Mueller explains:
With the 911, we are up to 22 derivatives. We use this as an example for the other models.
We’re already seeing this with the Boxster Spyder and Cayman R, which increase Porsche’s profitability immensely by charging a premium for relatively limited upgrades (and in some cases, equipment deletion in the name of “weight savings.” So, between increased profit and the PR and brand-awareness benefits of launching “new” models on a regular basis, expect Porsche to continue to slice-and-dice each nameplate into a plethora of mildly-varying “new” nameplates (think Speedster, GTS, Sport Classic, etcetera).
But when the flip side of this coin is that Porsche is actually looking at fewer derivatives of its Panamera platform for the simple reason that the sedan sells well, and the additional bodywork and development needed to turn a sedan into a coupe hurts the bottom line when compared with the low cost and high profit of mix-and-matching different 911 engines, transmissions and equipment (or the relatively low cost of adapting Audi’s Q5 CUV into the Porsche Cajun). When asked if a 928-style coupe or shooting brake could be based on the Panamera, Mueller answers
There are a lot of ideas out there. Our designers and engineers have fantastic ideas, like a two-door Panamera that makes even more of a coupe-like impression, and so on. We’re keeping all our options open. Currently, things are going so well with the Panamera that we’re not in any hurry…
I can as well very well imagine a long-wheelbase version, especially for growing markets such as China and Russia. We also think that a plug-in hybrid concept would fit well with the Panamera.
Stretching a sedan’s wheelbase and adding a larger battery and plug-in equipment is all relatively easy, and because such upgrades will play well in the not-especially-sports-car-friendly growth markets of China and Russia, that’s the priority. Further arguments for plug-in and hybrid developement: increasing emissions standards. Mueller notes
We are planning a hybrid concept in each model line. As already mentioned, we’re thinking about a plug-in hybrid variant of the Panamera. That would be the first of its kind in its premium sedan segment. With the 911, sportiness remains center stage. Thus we are planning a mild-hybrid variant (an automatic start-stop function) here at first.
Should it become apparent by 2020 that 20 percent of all new cars will already be electrically driven then you can take it that Porsche will also be challenging for 20 percent of its sales with electric vehicles. But I’m figuring on a total EV share closer to between 3 percent and 5 percent by 2020. We are now almost over the initial hype before the business has really got started. But we are not closing our minds to this development. If by 2050 a manufacturer’s average fuel consumption is not allowed to exceed 0.9 litres per 100 kilometers and the CO2 emissions per kilometer are at 20 grams then we have to prepare ourselves for this in good time.
Even when it comes to its highest-end supercar, Porsche thinks profit first. Mueller reveals that Porsche’s last hypercar, the Carrera GT, cost €120m to develop and implies that the forthcoming 918 Spyder will have a similar development cost, plus the additional cost of developing its hybrid drivetrain. And since the 918 will cost at least €600k and 918 models will be produced, Porsche’s looking at well over €550m in revenue from its range-topping hybrid hypercar (again, before hybrid drivetrain development).
But after the new 911, the LWB plug-in Panamera and the 918, Porsche may be facing its biggest profitability challenge yet in the form of “Project Mimo,” the long-rumored “baby Boxster.” That vehicle is said to be based on an architecture that could be shared with VW, but Mueller has more historical connotations to implant in the minds of consumers, calling it
a legitimate successor to the Porsche 550 – namely a small mid-engine sports car. Actually I couldn’t imagine a better name for a small roadster like that than the 550. But we’re just in the assessment phase.
And what are the competitors for this “modern 550”?
To be honest, very few. In another price bracket, there are models around such as the Mazda MX-5 with a segment share of just under 50 percent. We think that there is still a lot of room for Porsche and one VW sister model.
Competing at the Mazda Miata price point is going to be a huge challenge for Porsche, especially if there’s going to be a cheaper VW version keeping them honest. Of all the brand’s future plans, this is the one that seems most out of its current pattern of minimal development, maximum variation and premium pricing. It’s also the model that seems most intriguing. We’ll be curious to see if Porsche is able to add affordability to its values of sportiness and profitability.