A simple reason why Porsche is in serious long-term trouble

[Vim Schrotnock]

I love Porsches, and I've been racing them for over 20 years. But if you think about why Porsche has been the ultimate (OK, maybe Ferrari here) performance car for so long, it's a combination of two things. Engine and Chassis. I would say that in terms of performance and durability, the Porsche engines are at the pinnacle of the industry.

Now, with the advent of EV's, the engine no longer exists, and that simply eliminates one of the primary benefits that Porsche offered. With the introduction of the Taycan, Porsche produced a car with a motor that they had no experience whatsoever developing. Other companies have developed motors and drivetrains that are equal to the Porsche offerings in terms of power, response, and efficiency. They have lost one of their primary advantages that they had maintained for decades, and that spells big trouble for the brand.

I'm old school and still race my six speed manual, and there is nothing like the engagement you get with a manual transmission, no 'nannies' (other than ABS), and a beautiful sounding six cylinder engine. Sadly, those days are gone for road cars, and Porsche is in a very bad position right now. Not sure if they can fully recover.

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[Vercingetorix]

Last I read Porsche sales were up last year worldwide except for China. You’re doom and gloom is lost on me.

 

[Vercingetorix]

And I wouldn’t consider the 919 a complete failure and it had an electric motor. And the 918. And GT3s with the Williams flywheel. Porsche is not new to this.

 

[Murph7355]

....

I'm old school and still race my six speed manual, and there is nothing like the engagement you get with a manual transmission, no 'nannies' (other than ABS), and a beautiful sounding six cylinder engine. Sadly, those days are gone for road cars, and Porsche is in a very bad position right now. Not sure if they can fully recover.

Did you sell your Taycan?

 

[ForeverWild]

I love Porsches, and I've been racing them for over 20 years. But if you think about why Porsche has been the ultimate (OK, maybe Ferrari here) performance car for so long, it's a combination of two things. Engine and Chassis. I would say that in terms of performance and durability, the Porsche engines are at the pinnacle of the industry.

Now, with the advent of EV's, the engine no longer exists, and that simply eliminates one of the primary benefits that Porsche offered. With the introduction of the Taycan, Porsche produced a car with a motor that they had no experience whatsoever developing. Other companies have developed motors and drivetrains that are equal to the Porsche offerings in terms of power, response, and efficiency. They have lost one of their primary advantages that they had maintained for decades, and that spells big trouble for the brand.

I'm old school and still race my six speed manual, and there is nothing like the engagement you get with a manual transmission, no 'nannies' (other than ABS), and a beautiful sounding six cylinder engine. Sadly, those days are gone for road cars, and Porsche is in a very bad position right now. Not sure if they can fully recover.

You forgot Porsche steering, suspension, braking and overall handling. My Carrera 2 at 380 hp could impress anyone at a consistent speed of 50 mph on a twisty mountain road. My Taycan drives like a Porsche. Other EVs are not in the same league because of overall handling.

 

[Freeewilly]

Last I read Porsche sales were up last year worldwide except for China. You’re doom and gloom is lost on me.

The last I heard today is Porsche is going to cut 1900 jobs in Germany by 2029.

 

[Vercingetorix]

The last I heard today is Porsche is going to cut 1900 jobs in Germany by 2029.

Yes, but look at how many more employees they have added the last few years. Dropping 1900 probably drops them to 2023 levels.

 

[Mr.Smith]

Porsche is a low volume, enthusiast brand. It's true the benefits of the drive train deminsh as a BEV, but the suspension, driving dynamics, build quality, aesthetics.
If those components didn't matter, everyone would have a Chevy Bolt.

Porsche isn't trying to compete in the lower end, volume market.

Now if the car market is shifting to a cell phone on wheels market that @chun explained so well, then that changes everything.

I look at it as Apple watch vs high Horology.
Most people will buy Apple watches, but there is a strong market in high Horology.
Porsche moving to more Exclusive manufaktur & Sonderwunsch confirms this.

 

[chun]

Porsche is a low volume, enthusiast brand. It's true the benefits of the drive train deminsh as a BEV, but the suspension, driving dynamics, build quality, aesthetics.
If those components didn't matter, everyone would have a Chevy Bolt.

Porsche isn't trying to compete in the lower end, volume market.

Now if the car market is shifting to a cell phone on wheels market that @chun explained so well, then that changes everything.

I look at it as Apple watch vs high Horology.
Most people will buy Apple watches, but there is a strong market in high Horology.
Porsche moving to more Exclusive manufaktur & Sonderwunsch confirms this.

But the competition is just as fierce in that "horology" market for Porsche. It's not like Ferrari, Lambo, mclaren and all the other even more premium brands are gonna disappear. And Porsche keeps increasing prices, to the point that you're in direct parity with Ferrari, but without offering that wild sports car vibe, at least in my eyes.

We'll see how things progress. Afterall, whatever direction Porsche is on now, will change when the bosses get replaced soon.

 

[Freeewilly]

I don't think Porsche wants to move into exclusive market. Their goal is to sell as many cars as they can, that's why they are selling Cayenne and Macan. If Taycan sales continue to grow, they will do everything they can to expand the manufacturing to meet the demand.

Hermes is an exclusivity brand. They intentionally limit the production to maintain exclusivity

 

[Flying ace]

Every performance car make and model is at risk. The essence of a sports car's unique character is its motor. Challenge is to make a EV an uniquely Porsche experience, which Taycan executes well. Time will tell with j2. It's too easy to replicate an EV.

 

[Mr.Smith]

I don't think Porsche wants to move into exclusive market. Their goal is to sell as many cars as they can, that's why they are selling Cayenne and Macan. If Taycan sales continue to grow, they will do everything they can to expand the manufacturing to meet the demand.

Hermes is an exclusivity brand. They intentionally limit the production to maintain exclusivity

Porsches ASP is over $100k. That's a very narrow market.
Porsche would have to go down market to the $60k range.
It's not difficult to take the PPE platform and make a mini Taycan with huge horse power, Like the SU7

They have said they are not interested in that business model and it was recently announced they will focus on increasing employee count in Executive manufaktur and Sonderwunsch

 

[JimBob]

Porsche's big problem is that it is now a public company and not private and there appear to be no sources of growth to support the original valuation. And with all the tariffs and other auto industry problems they are in a bad place. The stock came out Sep 2022 at 84 euros per share with a market cap of 76 billion euros and is now down 30% 40%. As a private company it could maybe stay a niche player, but as a public company it needs to be more than a niche player.

 

[Lazy]

Nah

 

[A.Mayor]

I don't think Porsche wants to move into exclusive market. Their goal is to sell as many cars as they can, that's why they are selling Cayenne and Macan. If Taycan sales continue to grow, they will do everything they can to expand the manufacturing to meet the demand.

Hermes is an exclusivity brand. They intentionally limit the production to maintain exclusivity

To some extent, Porsche is like Hermès. Luxury houses make their money from ready-to-wear, leather goods, perfumes, and accessories, as Porsche does with the Cayenne, Macan, and — dare I say — even the **Taycan and lower-trim 911s. Classic bags like the Birkin and Kelly are limited (but not the real bread and butter of the business) — just like the 911 GT3 or other limited flavors of the 911.

**It was in the cards, but has not panned out.

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