Return of Porsche’s Le Mans Features Racing Version of 918
The Porsche that whipped around the Le Mans race track this weekend for the first time in 16 years was unlike most of the brand’s vehicles these days: the low-slung model was a sports car rather than a SUV.
As global demand for vehicles like the 911 stagnate, Porsche returned to the French sports-car race -- the world’s oldest -- yet failed to finish as technical issues forced it to pull out two hours before the checkered flag yesterday. Still, the goal was less to win than to remind affluent buyers that the German brand remains focused on performance, even if the majority of the vehicles it sells are suited to shuttling kids and carrying groceries.
“It was a mistake to stop competing at the top rung of motor sport,” Chief Executive Officer Matthias Mueller, who took charge of the Stuttgart-based brand four years ago, said in an interview last week. “We are a sports-car maker and racing belongs to our brand.”
The fact that Porsche needed to reinforce its sporty reputation reflects its increasing reliance on SUVs, which threatens to dilute that cachet. The high-riding Cayenne, which was introduced in 2002, accounted for 52 percent of all Porsches sold last year, and the shift away from pure-bred sports cars has become more pronounced with this year’s rollout of the Macan. The compact crossover will boost SUVs to 62 percent of Porsche’s sales in 2014, IHS Automotive forecasts.
“Porsche has to sustain its sports-car DNA,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “But to be successful in the long run, Porsche must also carefully evolve and transform the brand to attract a broader customer base in a rapidly changing world.”
To maintain the allure that underlies its industry-leading profit margins, Porsche re-entered Le Mans, where it has the most wins since the race’s founding in 1923. It left in the 1990s when the company restructured after struggling financially. This year’s return involved developing the 919, a hybrid prototype specially built for the event. The car led for large portions of yesterday’s race. Porsche is trying to get the most out of that technology, using it as the base for the 918 Spyder, the brand’s most expensive car ever.
The $845,000 plug-in hybrid accelerates to 60 miles per hour in 2.5 seconds and has a maximum speed of 214 mph. Production will be limited to 918 vehicles to underscore the exclusivity of the car as well as the brand, making it a counterweight to the $49,900 Macan. Two-thirds of the super cars have already been ordered.
“I expect it will already be sold out by the end of the year,” Mueller, 61, said at the company’s headquarters in the Zuffenhausen area of Stuttgart. “We won’t sell a single additional model. That would be unfair.”
Even with 918 demand robust, Porsche’s bread-and-butter is now opulent, performance-oriented sport-utility vehicles rather than sports cars like the 911, Cayman and Boxster.
In China, the world’s largest auto market, wealthy consumers tend to be chauffeured and aren’t as wooed by the thrill of hair-raising curves and squealing tires. Instead, SUV comfort is sought after, and that’s a trend that’s not unique to China. Global SUV sales are set to surge 38 percent by the end of the decade to 21.5 million autos, while sports-car deliveries are due to remain below 900,000, IHS predicts.
Volkswagen AG (VOW), the 12-brand behemoth that bought Porsche two years ago, has a lot riding on getting the brand’s development and growth right. While Porsche will build a fraction of the more than 10 million vehicles that VW aims to sell this year, it’s a big contributor to earnings. Porsche posted first-quarter operating profit of 698 million euros ($948 million) or 24 percent of VW’s total. The group’s only nameplate to earn more was Audi, which won yesterday at Le Mans.
While Porsche pursues growth and intends to exceed sales of 200,000 cars next year -- three years earlier than planned -- CEO Mueller is aware there is a limit to how big the brand can get and still retain its elite image. That means abstaining from offering cheaper sedans and hatchbacks like Audi, Daimler AG’s Mercedes-Benz and Bayerische Motoren Werke AG have done.
“For us, price plays a certain role” in maintaining the brand’s profile, Mueller said. “The entry-level price for us in Europe is 50,000 euros. We don’t see any reason to reconsider that.”
Returning to Le Mans was part of the message to convince consumers that a Porsche is worth the money. The brand pulled out all stops to mark the occasion, setting up giant television screens at its museum in Stuttgart and keeping the building open to the public for the entire 24-hour race. More than 17,000 people attended the event, with the museum offering guided tours throughout the night, said Astrid Boettinger, a Porsche spokeswoman.
The automaker even built a miniature French village and served specialties such as Tarte Flambee and Merguez sausages for what it billed as the biggest Le Mans party outside the event’s home country. At the museum, the current models, including the Macan and Cayenne SUVs, were strategically placed alongside previous winners of the race, underscoring the connection.
“The SUV boom is a global phenomenon -- in emerging countries as well as the U.S. and Europe,” said Juergen Pieper, an analyst with Bankhaus Metzler in Frankfurt. “You don’t want to miss this as a carmaker, even niche players want to be there.”
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