Want More Profits? Hire a Porsche (Consultant)

Having been cut off the lucrative (and in the end deadly) derivatives business, Porsche looks for other sidelines. And it seems very much like they have found one: Consulting.

“Just as car enthusiasts envy Porsche drivers,” reports Automotive News [sub] “company executives salivate over the carmaker’s profit margins, the highest in the industry.” Said salivation generates juicy business at Porsche.

That prompted Porsche into teaching other companies how to generate hefty profits. Let’s hope they don’t tell their clients the truth: Just charge a lot of expensive extras.

Porsche already signed up clients such as Lufthansa, Volkswagen and shipbuilder Meyer Werft. Instead of learning how to sell inflated sat-nav systems, Porsche’s consulting clients aim to gain know-how in efficient production methods to boost profitability.

Porsche’s consulting division will expand its 220-strong workforce to serve an increased customer base of 150 companies.

Porsche is proud of an operating margin of 19 percent in their automotive unit. BMW must make do with 8.1 percent, while Mercedes-Benz has 9.5 percent and Audi a respectable 11 percent.

Actually, Porsche is recycling foreign know-how. When Porsche was doing atrociously in 1993, and Wiedeking took over, he hired Toyota’s consulting arm. Says Automotive News: “Under Toyota’s guidance, Porsche took steps to fine-tune cooperation with suppliers to ensure factories received parts just when they were needed on the assembly line, a method that’s been widely copied in the automotive industry and that Porsche is now helping companies in other industries implement.”

Gee. Valuable intellectual property. Taken from the Japanese by Germans, and sold at a gefty profit. What is the world coming to?