Germany's Porsche is an oddity in the auto business. While rivals such as Jaguar, Saab, and Aston Martin have been gobbled up by global players, Porsche continues to thrive as a small, niche performance-car producer. It sold a mere 48,500 cars last year, and its prices are high: The speedy 911 sports car costs $90,000-plus, while the sleek "entry-level" Boxter starts out at a crisp $41,000. In 2002, it plans to start producing a new sport-utility vehicle that will be called the Cayenne.
Despite their high prices, Porsche's products are in such high demand that some models have long waiting lists. Business Week Detroit Correspondent Jeff Green and Business Week Online Contributing Editor Thane Peterson checked in with Porsche CEO Wendelin Wiedeking at the North American International Auto Show in Detroit. Here are edited excerpts of their conversation:
Q: How much of an order backlog do you have at this point?
A:Too much. Even today, after we've doubled our production [for turbo models] from 2,000 units to 4,000 units, we can't deliver a car to our customers in less than one year. That's too long a wait for such an expensive car.
Q: Is it also a matter of your wealthy customers always having enough money to buy a Porsche, even when the economy is slowing?
A:Everyone knows that isn't true. It's a matter of product quality and substance -- and safety. Don't underestimate the safety issue. There must be a reason why the Big Three are going down. The Japanese are growing, the Europeans are growing.
Q: What's the profile of Porsche buyers?
A:The Porsche customer has always been [relatively] young. [In the U.S.] the typical 911 buyer is 46 to 65, average age 52. Household income: $310,000. The Boxster buyer is 36 to 55, with an average age of 47 [and] an average income of $243,000. [Buyers are] entrepreneurs, doctors. If the economy comes down, the customer base will be much more stable than in the past.
Q: Does the fact that you now offer a car seat for babies as an option on your cars say anything about the changing character of Porsche buyers?
A:No, we don't sell that many car seats.
Q: What can you offer with a sport-utility vehicle that's different? There are tons of them on the market already.
A:There's no doubt that we have to transfer some of Porsche's typical features to the SUV. We know from our surveys that a lot of our customers are waiting for a Porsche SUV. Then there will be no doubt that customers can proudly park their SUV next to a Mercedes S Class and other cars like that. On average, our customers own three cars: an SUV, a limousine or sedan, and a sports car.
Q: Most of your buyers are men. Will the SUV appeal to more women buyers?
A:On average, about 15% of Porsche buyers in the U.S. are women. For the Boxter, it's 30%. For the 911, it's 8%.... [But] there's no doubt that our sports cars have more of a male character than a female character.
Q: Do you have orders for the SUV already?
A:We've got a lot of orders, even though production won't start until 2002. I personally have received a lot of letters from people who want to reserve in advance. Many of them are executives.
Q: How many SUVs do you plan to build?
A:The official number is 25,000. But everyone who knows us will know that this is a very [conservative] number.
Q: You expect to sell 50,000 or more units this year, and you're adding the SUV, with 25,000-plus production in 2002. Could we see 100,000 units of annual production within five years?
Q: Why is the luxury-car market holding up so well?
A:Our product substance is excellent. All the German carmakers are doing well: Porsche, Mercedes, BMW, VW-Audi.
Edited by Douglas Harbrecht