[opinion] - hmmm…VW/Audi/Porsche _IS_ in trouble… [⚠️ ADMIN WARNING: NO INSULTING / POLITICALLY CHARGED POSTING]

[SoccerMan94043]

I don’t think the shareholders would allow their big profit leaders to be killed…. Talk about a quick CEO change

Sponsored

 

[Tooney]

Porsche Annual General Meeting - Porsche Newsroom
Porsche anticipates an operating group return on sales of between 5.5 and 7.5 percent. This takes into account one-off expenses of 800 to 900 million euros and tariff costs of around 700 million euros. This forecast includes assumed group sales revenues in the range of around 35 to 36 billion euros. Porsche expects an Automotive net cash-flow margin of between 3 and 5 percent.
. . .
“It all starts with our brand – and with our customers,” says Leiters. “That’s why in the future we will focus even more strongly on what defines Porsche and clearly distinguishes it: our sports car DNA, our identity of design, performance, driving pleasure, heritage and exclusivity.” Porsche remains the brand for people “who consciously want to drive themselves, especially in an increasingly automated world”. This is not about maximising sales volume, emphasises Leiters. “It’s about value, desirability and profitability. Selling more cars doesn’t automatically make Porsche stronger. We become stronger when customers make a conscious decision to buy a Porsche. It’s not because they really need it. It's because they really want it. And then they are willing to pay the appropriate price.”
. . .
In his speech to the virtual Annual General Meeting, Michael Leiters explicitly reaffirms his commitment to Germany as a business location: “The ‘Made in Germany’ label is currently under pressure because market conditions have become more challenging. However, we must not allow ourselves to be deterred by this.” It is important to capitalize on the company’s own strengths – and its ability to develop unique sports cars. “We must reinvent ‘Made in Germany’ and prove ourselves. Ultimately, that will determine whether we are successful.”

 

[daveo4EV]

Porsche Annual General Meeting - Porsche Newsroom
Porsche anticipates an operating group return on sales of between 5.5 and 7.5 percent. This takes into account one-off expenses of 800 to 900 million euros and tariff costs of around 700 million euros. This forecast includes assumed group sales revenues in the range of around 35 to 36 billion euros. Porsche expects an Automotive net cash-flow margin of between 3 and 5 percent.
. . .
“It all starts with our brand – and with our customers,” says Leiters. “That’s why in the future we will focus even more strongly on what defines Porsche and clearly distinguishes it: our sports car DNA, our identity of design, performance, driving pleasure, heritage and exclusivity.” Porsche remains the brand for people “who consciously want to drive themselves, especially in an increasingly automated world”. This is not about maximising sales volume, emphasises Leiters. “It’s about value, desirability and profitability. Selling more cars doesn’t automatically make Porsche stronger. We become stronger when customers make a conscious decision to buy a Porsche. It’s not because they really need it. It's because they really want it. And then they are willing to pay the appropriate price.”
. . .
In his speech to the virtual Annual General Meeting, Michael Leiters explicitly reaffirms his commitment to Germany as a business location: “The ‘Made in Germany’ label is currently under pressure because market conditions have become more challenging. However, we must not allow ourselves to be deterred by this.” It is important to capitalize on the company’s own strengths – and its ability to develop unique sports cars. “We must reinvent ‘Made in Germany’ and prove ourselves. Ultimately, that will determine whether we are successful.”

this is the wrong direction…{sigh}

there is a trend that embraces the "k-shaped" economy - make 12 "widgets" a year - find the 50 people who want them - overcharge for the "widgets" but you're amazing profitable because you're selling each "widget" for outrageous price and margin - very successful by the metric of "are we making money" - but only 12 people in the world actual get your product…

I fear this is Porsche's strategy - "normal" people will not have access to Porsche's anymore…

one of the great things about Porsche was it used to be the brand that "all it took was money" to be able to obtain the product - I deeply fear this will no longer be the case…

 

[chun]

. . .
And then they are willing to pay the appropriate price.”
. . .

That will indeed be a challenge.
We went looking at an Xpeng p7+ AWD. to replace the taycan as the "family" 4 door car.
Made in Austria, for 53k. 45k for RWD.
No customization, comes with black or black & white interior, and like 4-5 paint colors.

Full Nappa Leather interior, great software, 450 kw max charging speed, 500km of real range. Plenty fast accelration. Comes with blended breaking calibrated about as good as my taycan, no one pedal drive bullshit. LOADs of interior space.

Does it handle like the taycan or a 911? No, but its a 4 door sedan, don't think it needs to. It still handles better than a tesla model s/3.

So what's the appropriate price? When 50k chinese EV cars made in Europe by european hands offer 90% of what porsche offers.

I think porsche is hoping that people will pay for the badge 100-150k extra, for a car that offers the same as a 50-80k car. I somehow doubt people will... at least not unless it's a 911.

When it comes to taycans, in switzerland, the market has spoken. Taycans between 40-90k are selling. Anything above, sits unsold. That's what the market values the taycan at, and it's fair, because there are cars at that price that offer similar specs. Does that mean that Porsche will sell the taycan 2 for 80k? Likely not, and that will mean that it will likely not sell.

 

[daveo4EV]

Porsche's 911's can command beyond market pricing
other ICE Porsche products less so…but can to some degree

Porsche's EV's are generally good products with good features - the only thing wrong with Macan/Taycan/Cayenne EV is the price vs. competitive EV's

Porsche's ICE price points are protected by a number of technical/mechanical-complexity/manufacturing "moats" in that it's hard to design/manufacture/produce an ICE that actually "matches" a Porsche ICE product…so they can command beyond market pricing since actual competitors are less, equal or more expensive and lower volume (more bespoke less drivable like a normal car) and it's expensive to "enter the ICE market" to compete with Porsche in the ICE space…

EV's lack many of protective "moats" that Porsche enjoy's in ICE land- and in fact they are by design "equal" - and in some cases other and newer competitors are at least equal if not better than Porsche - and performance is no longer a distinguishing characteristic…and software is more important as it modern feature sets…

Porsche's EV problems are their price points are locked/aligned into their ICE pricing/performance ladder - and Porsche EV products are not competitive at performance ICE price points (as @chun notes)…

Porsche's EV prices being "locked into" their ICE pricing ladder is their business model problem right now…

if they lower their EV's to be "competitive" you can buy a "porsche" with equal performance for "less money" than a "porsche"

if you keep the EV's matching ICE price points - your EV's are not competitive

if you lower the ICE price points you destroy margins and shareholder value…

Porsche can't be competitive in the EV market place because it will destroy/disassemble their ICE business…

Porsche is f*cked…

the ONLY thing they can do is move to lower volume more bespoke products that enhance their "moat" against competition entering their market … rather than compete on the merits of their EV products - they appear to be choosing to embrace legacy technology mastery and double down on _MORE_ mechanical complexity to defend their position and justify their ever increasing price points and lower volume products for an increasining small population of people who can afford to own products like that…and will pay to do so - it's the luxury watch market model - and it's funny because an ICE vehicle has more in common with a watch than it does with a digital EV…

in 10+ years only a few members of this forum will still be Porsche customers but it won't be for their EV products…

I'm sad…I liked Porsche - but apparently they have determined they can not complete in the EV market place, nor do they wish to make the adjustments necessary to do so…

I look forward to them being wildly profitable making 1,350 units based priced @ $570,000-$750,000 911's annually…

 

[Vim Schrotnock]

Agree with pretty much everything. Porsche really can't compete on EV's. - they don't have the infrastructure or expertise in batteries, electronics and software. I do believe their business depends on hybrids - there they can draw on their race experience and provide a very high performance hybrid that still has the 'thrill' of a Porsche. This should sustain the business for a while. I just don't see any version of the Taycan surviving for long, and I don't see any more pure EV sports cars. And pure EV SUV's?????? Not a chance.

 

[daveo4EV]

Porsche's 911's can command beyond market pricing
other ICE Porsche products less so…but can to some degree

Porsche's EV's are generally good products with good features - the only thing wrong with Macan/Taycan/Cayenne EV is the price vs. competitive EV's

Porsche's ICE price points are protected by a number of "moats" in that it's hard to design/manufacture an ICE that actually "matches" a Porsche ICE product…so they can command beyond market pricing since actual competitors are equal or more expensive and lower volume, and it's expensive to "enter the market" to compete with Porsche in the ICE space…

EV's lack the protective "moats" - and in fact they are by design "equal" - and in some cases other and newer competitors are at least equal if not better than Porsche - and performance is no longer a distinguishing characteristic…and software is more important as it modern feature sets…

Porsche's EV problems are their price points are locked into their ICE pricing ladder - and Porsche EV products are not competitive at that price points (as @chun notes)…

Porsche's EV prices being "locked into" their ICE pricing ladder is their business model problem right now…

if they lower their EV's to be "competitive" you can buy a "porsche" with equal performance for "less money" than a "porsche"

if you keep the EV's matching ICE price points - your EV's are not competitive

if you lower the ICE price points you destroy margins and shareholder value…

Porsche can't be competitive in the EV market place because it will destroy/disassemble their ICE business…

Porsche is f*cked…

the ONLY thing they can do is move to lower volume more bespoke products that enhance their "moat" against competition entering their market … rather than compete on the merits of their EV products - they appear to be choosing to embrace legacy technology mastery and double down on _MORE_ mechanical complexity to defend their position and justify their ever increasing price points and lower volume products for an increasining small population of people who can afford to own products like that…and will pay to do so - it's the luxury watch market model - and it's funny because an ICE vehicle has more in common with a watch than it does with a digital EV…

in 10+ years only a few members of this forum will still be Porsche customers but it won't be for their EV products…

I'm sad…I liked Porsche - but apparently they have determined they can not complete in the EV market place, nor do they wish to make the adjustments necessary to do so…

I look forward to them being wildly profitable making 1,350 units based priced @ $570,000-$750,000 911's annually…

an alternative "plan" and what I'd do if I were Porsche CEO is split the brand…

Porsche for ICE products
Ferdinand by Porsche for their EV products…

now we can decouple the pricing ladders - preserve Porsche's ICE heritage and pricing ladder - you want a high performance luxury ICE buy a Porsche - and pay for it…

if you want a high performance high quality high luxury EV buy a Ferdinand by Porsche product - Ferdinand can charge a bit more than competitors for a "better" product, but it's ability to compete in the eV space will no longer be handicapped by Porsche's ICE business needs and price points…

but heh what do I know…

it was a mistake to sell a digital product under an analog brand known for performance and high margins and high performance

digital kills analog…

selling both under the same brand ultimately compromised both product markets and lead to muddled strategy…and no clear focus or strategy to be successful with both types of products…

I think this is where we're at…

Porsche should've never been an EV vendor…it's an ICE product - it should only be an ICE product - they could've leverage their experience/brand and engineering skills into launching a new EV brand with Porsche DNA and heritage, but a different market, different rules, different competitive pressures…

this business case study will be fascinating for years to come.

 

[daveo4EV]

updated the title of this topic …

 

[whitex]

Agree with pretty much everything. Porsche really can't compete on EV's. - they don't have the infrastructure or expertise in batteries, electronics and software. I do believe their business depends on hybrids - there they can draw on their race experience and provide a very high performance hybrid that still has the 'thrill' of a Porsche. This should sustain the business for a while. I just don't see any version of the Taycan surviving for long, and I don't see any more pure EV sports cars. And pure EV SUV's?????? Not a chance.

Why is hybrid doing anything for Porsche? They don't market (nor even list in the specs) fuel consumption. They continue to market on performance, so "hybrid" for Porsche may serve a role of a turbo/supercharger power booster, but that's it.

PS> Most people don't fully grasp the point of a hybrid drive train, video below is a bit long, but provides a good overview of this topic. I don't think this is Porsche wheelhouse (they don't want to simplify drivetrains). Porsche hybrids are either for performance or regulatory compliance. They could get the latter if they spun off an EV sub-brand.

 

[whitex]

I look forward to them being wildly profitable making 1,350 units based priced @ $570,000-$750,000 911's annually…

I think they already tried their ultimate profitability strategy - a near 100% profit margin product to sell based purely on heritage and exclusivity. Click the picture to see all the exclusive virtual 911's.

https://www.porsche.com/international/communities/pioneers-circle/

 

[chun]

do believe their business depends on hybrids

Maybe until 2035.

From 2035, they need to sell 9 to 9.5 EVs for every 1 single 911 they sell. And the 911 they sell will have to be a hybrid vastly skewed towards the EV side, to be able to adhere to the regulations on pollution that keep being more and more demanding with each year.

These regulations are not going away because porsche can't compete in the EV market. In fact, so far they have been very succesful and on track, meating each % step in every given year.

Unless porsche plans to leave the EU & Chinese market, they will have to continue to make EVs. And if they don't want to go bankrupt, their EVs will have to be competitive. The regulations and market dictate so.

 

[chun]

I think they already tried their ultimate profitability strategy - a near 100% profit margin product to sell based purely on heritage and exclusivity. Click the picture to see all the exclusive virtual 911's.

https://www.porsche.com/international/communities/pioneers-circle/

Didn't know this was a thing, but not surprised.

Was hoping people able to afford 911s would be smarter... god, people are dumb.

 

[daveo4EV]

I think they already tried their ultimate profitability strategy - a near 100% profit margin product to sell based purely on heritage and exclusivity. Click the picture to see all the exclusive virtual 911's.

https://www.porsche.com/international/communities/pioneers-circle/

 

[Tooney]

an alternative "plan" and what I'd do if I were Porsche CEO is split the brand…

Porsche for ICE products
Ferdinand by Porsche for their EV products…

now we can decouple the pricing ladders - preserve Porsche's ICE heritage and pricing ladder - you want a high performance luxury ICE buy a Porsche - and pay for it…

if you want a high performance high quality high luxury EV buy a Ferdinand by Porsche product - Ferdinand can charge a bit more than competitors for a "better" product, but it's ability to compete in the eV space will no longer be handicapped by Porsche's ICE business needs and price points…

"Ferdinand" is not an appealing car name.
"I've just got a 29 Ferdinand..."
Nuh uh.
(In the same category as BYD's Yangwang.)

 

[daveo4EV]

"Ferdinand" is not an appealing car name.
"I've just got a 29 Ferdinand..."
Nuh uh.
(In the same category as BYD's Yangwang.)

it's obviously a place holder

Sponsored