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The recently launched dealership in Vancouver is Porsche Centre No. 16. (Porsche)
The recently launched dealership in Vancouver is Porsche Centre No. 16. (Porsche)

Brand Strategy

Cato: Porsche puts the pedal to the metal Add to ...

Bernhard Maier, Porsche’s global sales chief, doesn’t look particularly wrung-out for a globe-trotting executive who’s bouncing from continent to continent, popping in here, there and everywhere to open new Porsche dealerships from Shanghai to Oakville, Ont., to here on the left coast. And that’s just three weeks for him.

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No, he’s positively bursting with energy tonight. Here at the grand opening of a second multimillion-dollar Porsche dealership in as many evenings, Maier is mingling with the moneyed guests sipping bubbly as they crowd about the expensive sheetmetal. The store itself is a glistening example of Porsche’s new global branding, right down to the floor-to-ceiling glass windows.

This Porsche dealership in Vancouver is owned by the Dilawri Automotive Group, itself a dealership colossus with 46 stores selling 29 automotive brands from Ontario to British Columbia. Annual revenue: more than $1-billion. Tonight’s gala follows a similar event 24 hours earlier when the Policaro Automotive Family – six dealerships in all – threw open the doors to Canada’s 15th Porsche Centre in Oakville, Ont. Vancouver is Porsche Centre No. 16.

Canada is special for Porsche, says Maier. Canadians buy high-performance Porsches in numbers that defy our reputation for penny pinching. So, even though Maier was just in Shanghai to open Porsche’s largest dealership in the world, he’s here to toast Canada. Our contribution to Porsche is not forgotten.

Porsche’s contribution to the sprawling Volkswagen Group is front-of-mind in Germany, too. Clipped to my notebook is a Bloomberg report that says Porsche accounted for €1.29-billion ($1.86-billion) of parent VW’s first-half operating profit of €5.78-billion. Even though Porsche is tiny within Volkswagen Group – selling just 143,096 cars in 2012 – its earnings contribution trails only the Audi luxury brand and the mass-market VW brand. Audi, for the record, sells nearly 10 times the number of vehicles.

Porsche has huge growth plans for the future, though Maier is quick to tell me that in the automobile world, where global new vehicle sales will top 70 million in 2013, Porsche is and will remain a bit player in terms of sales – a small, tightly focused premium player, with no intention of diluting a valuable brand by going all mass market.

By 2016, Porsche plans to nail global sales of 200,000 vehicles annually. That’s it. Canadians are doing their part for the cause, too. Last year, Porsche Canada sales hit 3,003, an record that has already been broken in 2013. Through the end of October, sales were up 23.1 per cent to 3,113. China, where the new Shanghai dealership is located, may be Porsche’s biggest market, but sales there are up just 15 per cent this year.

Retailers, such as Porsche Centre Vancouver dealer principal Ajay Dilawri, say the investment in new facilities makes sense, given what’s coming down Porsche’s product pipeline. Last month in Los Angeles and Tokyo, Porsche unveiled the new Macan compact sport-utility vehicle, which will surely become the brand’s best-seller.

Porsche won’t tell us what the Macan will list for next year, but it most certainly will come in below $50,000. After all, the least expensive Cayenne SUV lists for $57,500. The Macan is, dare we say it, a volume car for Porsche, one aimed at younger buyers and women. And Maier says it exists to meet demand in the fastest-growing luxury segment. It will help Porsche “better exploit” all markets, he says.

In some ways, Canada is new territory for Porsche. Up until April 2008, Porsche was treated like an afterthought and operated out of the United States and Germany. Then in 2008, Porsche Cars Canada was formed as an independent subsidiary. Sales exploded and they continue on a record pace.

And while Maier is happy to talk about new markets Porsche is entering – “We’re aiming for an additional 15 countries by the end of the decade,” he confirmed over cocktails and canapes – Canada is growth territory, too.

Certainly Porsche has new products to drive interest among buyers here and elsewhere. Aside from the recent redesigns of the 911 Carrera and Boxster, the 911 GT3 redesign came in 2013, along with the new 911 Turbo, the debut of the Panamera Hybrid and a major freshening to the Panamera itself. Next year, the 911 Turbo cabriolet gets a redesign, the Macan has its debut and then the 918 Spyder arrives at the top of the Porsche range.

The latter, a super sports car with plug-in hybrid drive listing for $845,000 (U.S.), is not strictly a green machine, however. The 918 Spyder, combining a gas engine with electric-motor-based drive, will accelerate from 0 to 100 km/h in 2.8 seconds and offers an average standard fuel consumption of between 3.0 and 3.3 litres/100 km. Only 918 of them will be built and sold as 2014 models. How daring is the 918 Spyder? Porsche’s last street-legal supercar was the 2004 Carrera GT and it cost about $440,000, or roughly half the upcoming 918 Spyder.

The 918 Spyder may be daring, but the Macan is the riskier of the two new Porsche models. The SUV takes Porsche further downmarket than it’s been in decades and that presents a gamble. Will Porsche damage its image by introducing a relatively affordable SUV for wealthy buyers rather than sticking to sports cars for the very rich? It might. As The Wall Street Journal notes, Porsche stumbled in the 1970s and 1980s with lower-priced models. They were perceived as cheap imitations of real Porsches and drove like it.

Indeed, by the late 1980s and early 1990s Porsche was teetering on the edge of bankruptcy. A series of miscalculations had driven Porsche into the ditch, including a reported plan in the 1970s to drop the 911 entirely and replace it with the front-engined 928. Disaster after disaster.

Heads rolled at the very top and by 1993, Wendelin Wiedeking had become CEO. His commitment to product excellence that reflected the Porsche brand was obvious from day one. Wiedeking pioneered the concept car unveiled in the early 1990s at the Detroit auto show that by 1997 became the Porsche Boxster. Under his watch, Porsche engines went from air-cooled to water cooled and the highly successful Cayenne SUV was introduced, followed by the Panamera. Wiedeking left Porsche in the wake of a failed takeover fight with VW, but his legacy is in play today.

But all this change and growth does raise the question for many aficionados: has Porsche surrendered its magic in pursuit of profits and sales? Is Porsche now nothing more than an SUV and hatchback company that also happens to sell some very nice sports cars? Sales of the Cayenne SUV and the Panamera hatch beg the question.

Consider that in 2012, Porsche had a very good year with the 911, selling 25,475 for a year-on-year increase of 31.3 per cent. Boxster sales were also up 29.1 per cent, to 9,253. Compare that to the Cayenne, however. Last year Porsche’s best-seller was the Cayenne, with 74,763 sold. The Panamera was Porsche’s second most-popular at 27,331. Porsche of Stuttgart, Germany, sells plenty of sports cars, but even more SUVs and grand touring Panameras.

So what is Porsche? By next year it will be a car maker with five product lines, the most popular and profitable of which will NOT be sports cars. Perhaps what sets Porsche apart is this mix of sports and other cars, all of which last and perform.

That is, finicky as they may at some times be, Porsche says 70 per cent of all the Porsches ever built are still on the road. In the most recent J.D. Power and Associate Vehicle Dependability Study, Porsche was No. 1 among European car brands and second overall behind Lexus. J.D. Power’s Initial Quality Study ranks Porsche No. 1, too.

All very impressive, really. Longevity and stability are at the heart of why Porsche finds itself opening new dealerships all over the world, including shiny ones in Canada. Maier argues that Porsche is treading carefully, aware of the risks to the brand. But this is a very delicate balancing act, nonetheless.

Yes, Porsche has grand ambitions. And they explain the bounce in Maier’s step.

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