Bloomberg News
Starting next year, the chances are that the next Porsche you see will be a sport-utility vehicle.
The maker of the iconic 911 sports car is accelerating expansion beyond its traditional niche with the new Macan, which debuts today at the Los Angeles Auto Show. Vying with the Range Rover Evoque for wealthy suburban moms, the compact model will probably become Porsche's best seller by 2015 as SUVs account for a majority of the brand's sales, according to estimates from IHS Automotive.
To lure drivers seeking a more practical vehicle, Porsche is outfitting the Macan with features like an electronic trunk hatch and as much as 1,500 liters (53 cubic feet) of cargo space. The model, which goes on sale April 5 in Germany, has a starting price of 57,930 euros ($78,190) for the 340-horsepower Macan S version, 24 percent cheaper than a comparably equipped Porsche Cayenne SUV.
'One doesn't need sports cars to be premium,' said Arndt Ellinghorst, an analyst with International Strategy & Investment Group in London. 'There will always be the 911, but the growth is happening elsewhere.'
The goal is to boost Porsche's total deliveries by 38 percent to more than 200,000 vehicles in the coming years. The Stuttgart, Germany-based carmaker's growth and outsized profits are a key part of parent Volkswagen AG (VOW)'s effort to overtake and Toyota Motor Corp. (7203) as the world's largest carmaker by 2018.
911 Slump
The shift into pragmatic vehicles for suburban shopping trips is a reaction to volatile sports-car demand. Sales of the 911, the brand's flagship, tumbled after the financial crunch and have yet to recover to pre-crisis levels, according to figures from industry consultancy IHS.
'Porsche has the potential to move into a somewhat lower-priced segment, but it has to be careful to not overdo it,' said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany.
Porsche's expansion will add pressure on Tata Motors Ltd. (TTMT)'s Land Rover. The upscale SUV brand, which already competes with the Cayenne, entered the compact SUV market in 2011 with the aggressively styled Evoque, helping to spur record sales. The base version is 34 centimeters shorter than the Macan and starts at 33,400 euros in Germany.
SUV demand continues to grow around the world, especially in China where street racers are less popular. In Europe, the Macan is seen as an option for everyday use in crowded streets.
Around Town
'I'm waiting for the Macan,' said Andreas Bauer, 50, who runs a heating company outside Frankfurt and owns a Cayenne as well as a 911. 'When my wife drives around town with the kids, the Cayenne is a bit too big.'
Together with the Cayenne, which is 16.5 centimeters longer than the Macan, SUVs will account for 64 percent of Porsche sales in two years, while the share of sports cars including the Boxster roadster will drop to 24 percent of the brand's deliveries, according to IHS. Sports cars accounted for the majority of Porsche sales before the introduction of the Panamera coupe in 2009.
The growth drive has clear benefits for Volkswagen. Porsche accounted for 22 percent of the Wolfsburg, Germany-based company's 8.56 billion euros in operating profit in the first nine months, even though it sold just 1.6 percent of the group's vehicles. A push for volume will be forgiven if the company stays true to its sports-car heritage.
Macan Performance
'As long as it allows them to continue producing the Porsches we really love, it can only be a good thing,' said Ian Fletcher, a London-based analyst with IHS Automotive.
Porsche hasn't neglected performance when designing the Macan, whose name stems from an Indonesian term for tiger. The 79,826-euro Turbo variant accelerates to 100 kilometers (62 miles) per hour in as little as 4.6 seconds, beating the base version of the 911 and the top-of-the-line Cayenne Turbo S.
Porsche invested 500 million euros to add an assembly line for the Macan at a factory in the eastern German city of Leipzig. The plant has a capacity to make 50,000 cars a year, equivalent to a quarter of the brand's sales goal. Executives shrug off concerns the SUV will water down the carmaker's image.
When the Cayenne was introduced in 2002, 'there were calls back then that Porsche was diluting its profile,' said Siegfried Buelow, head of the Leipzig plant, which also makes the Panamera. 'Today, we work three shifts a day and are struggling to keep up with demand.'
To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net
To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net
Post a Comment