Porsche Admits Trouble Ahead: “Our Business Model No Longer Works”
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This will be a challenge for all the Euro makers. BMW and MB have done a better job balancing the portfolio of products to get the right mix of price and volume. VW struggles because they cannot get the same margins. And Stellantis is dealing with similar issues - high fixed costs in Europe, EV transition cost allocation, and a prior CEO who was pretty tone deaf with respect to US consumers and managed to screw up a couple of cash cow brands. The new crew there will get it straightened out but it will take time.
There's nothing guaranteeing they won't be, or at least reduced, to a customer-only program(s).
Penske's contract began in 2023, and it wouldn't be a surprise to find that it was a four-year term in line with their commitment through the 2027 season.
Porsche and BMW are pushing for technical convergence, which is complicated by the fact that the technical regs were extended first to 2029, and now through 2032, to help Genesis, Ford, and McLaren better amortize their investments. Trying to balance LMH and LMDh has been a difficult task, but hasn't been helped by the rotten job the ACO/FIA have done. Porsche ran a perfect race at LM, but couldn't catch up to the yellow "customer" Ferrari, whose cars have enjoyed a too easy ride this season.
And despite the rules against it, the public grumbling has become louder of late, notably from Toyota. At least the top brass has noticed, even if the technical staff continues to fumble.
Also rumors surrounding Penske being poached by another OEM, or simply becoming a free agent if Porsche decides to cut back.
The GT programs are a separate business case, and keeps their foot in the door, so they're relatively safe.
I have the feeling that if they can get win #20 at LM in '26 or '27, they're gone.
It didn't take long for this golden age to tarnish, but that's sports car racing.
On the street car side, not having a backup plan for the (delayed) 718 EV or Macan EV, if they falter, was a misstep. 911s are great, even as they get bigger and more GT-like, but there's a big general price gap between them and the Cayman. And cranking out special editions is a tactic usually reserved for the struggling Anglo sports car marques just to help keep interest alive and get something out the door.
4WD
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Well, I travel allot and to places with money. There seems to be such a thing as high performance SUV’s - and many of the “sports car” and luxury brands are selling them. However, most vehicles coming off the huge car carriers are other brands - but it’s not like these are cheap and they sell too …
Also, parking can be an issue - can’t own 4 like we do LoL …
Also, parking can be an issue - can’t own 4 like we do LoL …
I found it interesting two local friends dumped their Tesla SUV as they could not stand or figure out the controls thru screen and bought Macan EVs and absolutely love them.
Also one complained of poor build quality of trim in theirs and hated the service experience which is not local.
Also one complained of poor build quality of trim in theirs and hated the service experience which is not local.
I never understood why Porsche so happily jumped on the SUV bandwagon. I would understand it if they were a standalone company, but being that VAG has VW for mainstream buyers and Audi for premium offerings, I never understood the need for Porsche to do anything but the 911 and Boxster/Cayman. I realize the Cayenne has been around a long time, however.
Point is, why do I need a Macan when the Q5/SQ5 exists? At the end of the day, I won't be sad as long as they continue making 911s that consume dinosaurs.
Point is, why do I need a Macan when the Q5/SQ5 exists? At the end of the day, I won't be sad as long as they continue making 911s that consume dinosaurs.
Porsche Cayenne is from 2002. VW owned Porsche since 2011. The Cayenne is from when they were a standalone company. In 2002 Porsche needed to sell something with more appeal to the masses, for better or worse.
Mostly agree...but, more sales at SUV margins....plus you get new traffic into the showroom. I remember when the Panamera first came out. I parked our 911 next to one and I chatted with the owner and remarking on the shape said "...almost looks like the engine is in back", to which the owner said "It is in the front" and gave me a quizzical look. It dawned on me that he had no familiarity with Porsche's heritage, but his new to the brand purchase is funding development of the ones we like...same w/ SUV's.
A long time ago I had a discussion with a GM marketing exec about the Cadillac wagon. He said something to the effect of; we build a few (relatively), we sell them all. A certain part of our customer base wants a wagon and we want to keep them in our showrooms.
The Macan, especially the S, is a sweet, sweet vehicle, I really like it. I probably wouldn't own one, but glad to let their buyers fund other Porsche products.
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4WD
$50 site donor 2025
Yeah, my hotel is next to places where your $5m waterfront still only gets you one parking spot - several of them hold a Macan …
4WD
$50 site donor 2025
OTH, MB and BMW built in America for years …
Not "probably" - it is.
Transition to EV has been part of the CCP "Made in China initiative" since the start, for the lack of oil reasons you already stated.
Motorbiscuit and Carscoops, "studies" utilizing data from an aftermarket warranty company. The Motorbiscuit article appears especially professional, thorough and well researched, especially the photographs. OK.....seem like legit sources
Good grief there is a lot of utter rubbish on the 'net, and calling these clickbait would be a compliment.
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Porsche has problems in its 2 biggest markets: US and China.
China demand is down, as others have posted.
The US has increased Porsche's cost to do business here, Porsche can only absorb so much.
Taycan issues such as software and range, while being addressed, have hurt sales and resale. And this is an expensive car...
And bottom line is, CEO Blume is stating Porsche costs are too high.
China demand is down, as others have posted.
The US has increased Porsche's cost to do business here, Porsche can only absorb so much.
Taycan issues such as software and range, while being addressed, have hurt sales and resale. And this is an expensive car...
And bottom line is, CEO Blume is stating Porsche costs are too high.
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Am I the only one reading the missing word in the title ?
“Our Current Business Model No Longer Works”
The Current business model is 80% EVs and German labor prices.
The 80% EV is out the window - clearly, and rightly so.
As for the German labor prices - the late Lee Kuan Yew, the man behind Singapore's errr - everything, said it way better than me 20+ years ago, in his interview with Spiegel.
It is long, but worth the read. Emphasis mine:
SPIEGEL: When you look to Western Europe, do you see a possible collapse of the society because of the overwhelming forces of globalization?
Mr. Lee: No. I see ten bitter years. In the end, the workers, whether they like it or not, will realize, that the cosy European world which they created after the war has come to an end.
SPIEGEL: How so?
Mr. Lee: The social contract that led to workers sitting on the boards of companies and everybody being happy rested on this condition: I work hard, I restore Germany's prosperity, and you, the state, you have to look after me. I'm entitled to go to Baden Baden for spa recuperation one month every year. This old system was gone in the blink of an eye when two to three billion people joined the race -- one billion in China, one billion in India and over half-a-billion in Eastern Europe and the former Soviet Union.
SPIEGEL: The question is: How do you answer that challenge?
Mr. Lee: Chancellor Kohl tried to do it. He did it halfway then he had to pause. Schroeder tried to do it, now he's in a jam and has called an election. Merkel will go in and push, then she will get hammered before she can finish the job, but each time, they will push the restructuring a bit forward.
SPIEGEL: You think it's too slow?
Mr. Lee: It is painful because it is so slow. If your workers were rational they would say, yes, this is going to happen anyway, let's do the necessary things in one go. Instead of one month at the spa, take one week at the spa, work harder and longer for the same pay, compete with the East Europeans, invent in new technology, put more money into your R&D, keep ahead of the Chinese and the Indians.
SPIEGEL: You have seen yourself how hard it is to implement such strategies.
Mr. Lee: I faced this problem myself. Every year, our unions and the Labour Department subsidize trips to China and India. We tell the participants: Don't just look at the Great Wall but go to the factories and ask, "What are you paid?" What hours do you work?" And they come back shell-shocked.
“Our Current Business Model No Longer Works”
The Current business model is 80% EVs and German labor prices.
The 80% EV is out the window - clearly, and rightly so.
As for the German labor prices - the late Lee Kuan Yew, the man behind Singapore's errr - everything, said it way better than me 20+ years ago, in his interview with Spiegel.
It is long, but worth the read. Emphasis mine:
SPIEGEL: When you look to Western Europe, do you see a possible collapse of the society because of the overwhelming forces of globalization?
Mr. Lee: No. I see ten bitter years. In the end, the workers, whether they like it or not, will realize, that the cosy European world which they created after the war has come to an end.
SPIEGEL: How so?
Mr. Lee: The social contract that led to workers sitting on the boards of companies and everybody being happy rested on this condition: I work hard, I restore Germany's prosperity, and you, the state, you have to look after me. I'm entitled to go to Baden Baden for spa recuperation one month every year. This old system was gone in the blink of an eye when two to three billion people joined the race -- one billion in China, one billion in India and over half-a-billion in Eastern Europe and the former Soviet Union.
SPIEGEL: The question is: How do you answer that challenge?
Mr. Lee: Chancellor Kohl tried to do it. He did it halfway then he had to pause. Schroeder tried to do it, now he's in a jam and has called an election. Merkel will go in and push, then she will get hammered before she can finish the job, but each time, they will push the restructuring a bit forward.
SPIEGEL: You think it's too slow?
Mr. Lee: It is painful because it is so slow. If your workers were rational they would say, yes, this is going to happen anyway, let's do the necessary things in one go. Instead of one month at the spa, take one week at the spa, work harder and longer for the same pay, compete with the East Europeans, invent in new technology, put more money into your R&D, keep ahead of the Chinese and the Indians.
SPIEGEL: You have seen yourself how hard it is to implement such strategies.
Mr. Lee: I faced this problem myself. Every year, our unions and the Labour Department subsidize trips to China and India. We tell the participants: Don't just look at the Great Wall but go to the factories and ask, "What are you paid?" What hours do you work?" And they come back shell-shocked.
The market for $200,000 cars must have started drying up.
Probably not as there will always be customers in that segment, certainly not for 911's (or Ferrari, Mclaren, $200k+), but it is very hard for a company to survive just on that market segment and that is where Porsche's troubles lie
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What is he saying here?
Labor costs are too high; labor is too powerful; labor is fat around the middle.
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