Since 1969, Porsche has developed three vehicles with Volkswagen/Audi: the 914, 924 and Cayenne. While we can debate the contributions these vehicles have made to Porsche’s corporate survival, they’re not vehicles that have brought greater glory to Porsche's sports car cred. And yet Zuffenhausen's zealots want us to believe that their decision to take control of Volkswagen is a good thing for both automakers. How credible is that?
My go-to Porsche guy, salesman Kirk Stingle, is on board with the German automaker's justification for its "Maus That Roared” Vee Dub takeover. With the so-called Volkswagen law (guarding Lower Saxony’s controlling interest in VW) headed for the legal dumpster, Porsche had to move to protect its parts supply. “You like your air conditioning unit?” Kirk asked. “Without VW? Fuhgeddaboutit.” For its part, VW gets Porsche’s production expertise.
Uh-oh. That sounds an awful lot like a lopsided proactive synergy defense. Do the letters DCX mean anything to anyone? To me, Daimler-Benz’ failed hook-up with The Crisis Corporation reveals a truism: the Germans aren’t very good at playing with others. Of course, in this case, we have Germans playing with Germans.
In fact, the acquisition is a German version of “All in the Family,” with VW Boss and Porsche shareholder Ferdinand Piëch playing Archie to freshly minted CEO Martin Winterkorn’s Meathead. Imagine the hilarity when they discuss the workmanship produced by Porsche’s foreign plants! Alternatively, schwäbisch Sopranos.
As we’ve outlined here before, VW is in an echt Pökel. The automaker's obese brand portfolio is a disaster. VW, SEAT and Skoda battle each other at the low end (hemmed in by Audi), while Audi, Bentley, Lamborghini and Bugatti duke it out at the top. Meanwhile and in any case, the German labor unions have Volkswagen by the short and curlies.
So here’s the theory: by minimizing the State of Lower Saxony’s ownership/control of VW, the takeover will loosen the union’s hold on the company, which will allow VW to bring some “sense” to their German labor contracts. At the same time, Porsche wunderkind Wendelin Wiedeking will teach VW how to make money through outsourcing, engineering, rationalization, platform sharing and generally kicking ass.
Time for some unbequem Wahrheit.
Despite calls for his resignation, the CEO who got VW into this mess in the first place is still large and in charge. I wouldn’t call Ferry Porsche’s grandson a megalomaniac, but this is the same CEO who publicly declared VW’s intention to match Mercedes-Benz’ product line model for model, up to and including the S-Class (hence the ill-fated Phaeton). Look how well THAT strategy turned out.
By the same token, Piëch’s “grand” vision created VW’s bloated brand portfolio. By adding Porsche to Volkswagen’s stable (or vice versa), brand overlap is about to get worse, not better. We’re talking Porsche 911 vs. Audi R8; Porsche Boxster vs. Audi TT; Porsche Cayenne vs. Audi Q8; and Porsche Panamera vs. Audi S8, Bentley Continental GT and VW Phaeton.
Although Piëch is reputed to rule his complicated kingdom with an iron fist, there’s still a GM-style bureaucratic bun fight to see who gets how much of what technology and marketing support, and when they get it. Can Porsche really work its cost-cutting magic on such a convoluted corporate culture? While Porsche knows a thing or two about building excellence on a budget, what makes them think they can convince thousands of managers and engineers that small is beautiful?
To my eye, this whole deal looks like a not-so-simple extension and consolidation of Piëch’s power. On the face of it, Porsche gets VW. In fact, Piëch gets Porsche AND ditches Lower Saxony. What he doesn’t get– and isn’t up for discussion– is a plan for extricating Volkswagen from its German labor woes and the branding Hell the former VW CEO and current Board member created.
Not that I care what happens to VW. As far as I’m concerned this deal should be called “Cry My Beloved Automaker.” Porsche, my favorite automaker on planet earth, the company that produces the best sports car money can buy, the poster child for this website’s “stay small, stay focused” mantra, is about to be subsumed by Volkswagen’s gi-normous bureaucracy.
Anyone who thinks this German merger of unequals won’t affect Porsche’s ability to keep their eye on the ball should carefully consider the 914, 924 and Cayenne. These vehicles stemmed from a partnership with VW, where Porsche could have (should have?) pulled the plug on any or all aspects of the various projects. Can you imagine a Porsche designed by a committee balancing its needs against those of VW, SEAT, Skoda, Audi, Lamborghini, Bentley and Bugatti?
In a world of compromise, Porsche stood apart. Not anymore.
I think Porsche's made before this event will be sought after much like fine wine, a reminder of what was not is.
Sounds vaguely familiar. Spend your profits on a buying spree by acquiring additional auto brands. The only thing that remains to be seen if this plays out the same as with Ford and GM
more to the point – i’m wondering if porsche thinks there might be important advantages for it, by aligning itself with vw in order to somehow gain ‘credits’ for the rapidly intensifying environmental compliance issues it must soon confront and successfully satisfy in order to remain a viable business?
It’s very unfortunate that the 944/968 had built itself a reputation and was known as “the poor mans Porsche”.
Join the PCA and you’ll see what I mean. Noses in the air and comments that that’s not a REAL Porsche.
This in spite of the fact that in club racing, this Porsche dominates its class due to its magnificent weight distribution, rear wheel
drive and big brakes.
Aesthetically this car has aged well. The flared arches, large rear screen and pop-up headlights place it firmly in the 1980s but endow it with a coolness sadly lacking from many sports cars of that era. Also, the Porsche 944 is now as cheap as it will ever be; it’s on the brink of true “collectability” — a tidy example will cost you no more than C$6,000 while a mint example can be yours for C$12,000.
Originally the car was powered by a 2.5 litre four-cylinder engine with just 165 bhp, hardly enough to get the pulse racing.
But the cars superb 50/50 weight distribution meant it cornered well and by keeping up momentum the 944 could still cover ground at a fair old lick.
On the road a Porsche 944 feels surprisingly modern in terms of its driving dynamics. As in any sports car you sit low in the cabin and rearward visibility is not the best, but the seats are generous and the dashboard is clear and well laid out.
Trunk space is also pretty reasonable and on late models a split folding rear seat gives more luggage room.
Late in 1985 Porsche introduced the 944 Turbo. Using the same 2.5 litre engine, the addition of a turbocharger pushed power to 220 bhp. This car ranks 32nd on Jeremy Clarksons’ “Best 100 cars of the last 100 years”, right along side the Datsun 240Z.
In October 1988 the 2.5 litre unit was replaced with a 2.7 litre motor, giving the 944 Turbo 250 bhp and a 0-60mph time of around 6 sec.
In the following January the non-turbo 944 became the 968 and received a new 3 litre engine with 211 bhp.
Although in outright terms these 3 litre cars are not as quick as the turbo models, they are considered by many to be the most practical to own, the most reliable and cheaper to run than the Turbo models.
For many buyers the 944s’ attraction is not its reasonable price and negligible depreciation, but its practicality as an everyday car.
With regular maintenance used 944s will happily clock up 200,000 miles without major incident.
However, neglect will cost you dear. Failure to replace timing belts every 60,000 miles can mean the need for a rebuilt engine,which can be as costly as replacing the whole car (about $6000). Turbochargers also have a shorter life expectancy than the rest of the car and any 944 that has covered more than 100,000 miles may need a new one sooner rather than later.
Fortunately Canada and the USA are dotted with non-franchised Porsche servicing specialists who can maintain your car inexpensively,
and many will provide a pre-purchase inspection.
Used parts are very affordable and a good supply is available.
philbailey:
Thanks for that paean to Porsche’s front engined finesse, but you’re talking about the evolution of the dire 924, not the original VW rig.
That’s all well and good in a “silk purse from a sow’s ear” sort of way, but one wonders what Porsche could have done with a clean sheet of paper, and whether THAT car would have survived to this day.
The counter argument is simple: they couldn’t afford a clean sheet design. In fact, Porsche has been on the brink of bankruptcy more than once.
Yes but– what about THIS time? Did they need to build the Cayenne? Did they need to go from that effort to a VW takeover?
At the risk of seeming naive, I’d say independence is crucial to Porsche’s Porscheness. Of course, that’s what they’ve been saying right up until, oh, this deal started.
Porsche seems to think like the old mercantilist empires: “We have to protect our supplies”. Except that in this case, british pirates, competing empires, and so on, are not really interested in disrupting Porsche’s supply of A/C units (or are they?).
I do not see any synergy between VW and Porsche either, except maybe for family reasons.
On another note, seeing the latest reply first is pretty confusing: you have to scroll down to read the first comment before scrolling back up.
This is the culmination of very old family business. The Porsche family would have likely done this decades ago, if they had had the money. Now Wiedeking has made it possible.
Yes, people like Piech have a different Weltanschau than most auto execs do today.
The upside: VW group market share is on the upswing in Europe. Audi is generating big profits and has become the equal of MB and BMW. But most of all, its about control. The Porsche/Piech can’t conceive of someone else buying and possibly cutting up VW.
Porsche Cars will be a separate entity held, along with VW, by a new holding company. I don’t think it necessarily will affect their product at all.
BTW: Porsche had nothing to do with designing the original 924. It was an Audi design (hence the Audi engine in the 924). But Audi ran into a rough patch, and decided not to put it into production, so Porsche took the whole thing off their hands.
It’s a clear example of how “mother Porsche” has been helping out at VW/Audi all these decades. Now mother is just making it permanent.
I’m a little concerned by the extent to which such analyses rely upon speculation. Arguments about how successful previous joint auto ventures have been are largely irrelevant; I don’t know of many strong examples to which the small Porsche absorbing the enormous VW can be compared easily. Why, for example, are we to assume that it’s Porsche’s products who will be designed by committee and balanced against the needs of their new subsidiary in the form of VW? I could make an equally powerful argument (which is to say, a hypothetical one) that VWs will receive a Porsche injection, not the other way around.
And I am also not convinced that such enterprises are universally doomed. Aston, Lambo, and Bentley have all been more successful than in any of their respective histories under their corporate umbrellas, and not necessarily only when measured by earnings/sales. All is not so apocalyptic in my opinion; for example, can we stop hearing about the “ill-fated Phaton?” It didn’t do well in the US, but continues to sell very well pretty much everywhere else; well enough that they’re considering taking another crack at it. We are not the Alpha and the Omega of the world auto market.
First off, THANK YOU for ditching the reverse order of the comments… it was driving me NUTS to the point where I stopped participating.
My only input to this issue is where it puts VW/Audi’s efforts into Diesel power? I’ve been daydreaming about a TDI-powered TT roadster for years (and will buy one in a heartbeat should such a beast ever be built) so I’d hate to see either the TT, or the oelmotors get the axe.
–chuck
Porsche taking over VW for parts supply? Perhaps I do not have the corporate acumen to see the validity of this arguement. If VW was taken over, a new company would likely have to honour any contracts with existing business partners. Secondly, unless you had it in for Porsche why would you cut off their parts supply? As the world’s (touch wood) profitable car company, I bet they pay their bills on time. Lastly, if VW went bankrupt, it would cost a heck of a lot less to buy plants, specs, etc for what you need versus the whole darn thing.
This smacks of dynastic imperatives. Porsche and VW being inextricably linked by history and genealogy.
Robert also brings up an interesting point about Porsche finances. It was not so long ago (about 1992) that Porsche was almost bankrupt. One reason? Too many models (911, 966, 928) taking up too many resources and generating too little business. Solution? Discontinue everything and reinvest in the 911. Result? Porsche saved! What do we have now? 911, Cayenne, Boxster/Cayman and soon the Panamera. Does this sound like a little bit of history repeating?
Maybe it’s just German industrial politics at work.
If I were to make the decision for Porsche to take over a less expansive car brand, I would choose Subaru. Both have a good reputation as great drivers’ cars. And yet they don’t compete at all. In that case, Porsche can focus on sports coupes. Subaru can produce all the sedans and SUVs.
I don’t know how strong a minority I’m going to fall into for saying this, but I fail to see the issue with the Porsche stake in VW… Robert – your comparisons across product lines for the VW Group and Porsche don’t ring true for me. Porsche’s lineup has always held very stratified air, and taking stock in the luxury arms of VW isn’t going to change that… Apart from the R8, Audi, Bentley, et al. have nothing that comes even *close* to competing with the Porsche 911/Cayenne/Boxster showcase… With the R8 itself, even, that’s okay, because I doubt many people would cross-shop the R8 with the Porsche lineup. Audi can use a low-volume halo car to bolster its image, and Porsche can sweat the (internal) competition.
Lining up the TT across from the Boxster is unfair at best, with a wide, $10k gulf separating the base Boxster from the wimpiest, front-driven TT… I suspect, too, that few who have driven (I haven’t) both the Touareg and the Cayenne will be able to compare directly. The Q7 may match up more closely, but the Cayenne has always been the market-pleaser – never Porsche’s bread/butter vehicle identity. The same sort of philosophy goes for the Phaeton on the VW side, which never should have shared a stable with the A8. What’s more, saying the Continental GT (with it’s lofty price tag) in the same breath as the S8 seems disingenuous at best… There’s a fiscal gap there that you could drive a shiny new 911 through…
Of the VW group, Bugatti is an exercise in showboating, Lamborghini is the boy racer to the 911’s refinement, Bentley is all tied up against Rolls (*not* Audi), and Audi makes sedans while Porsche makes sports cars… I fail to see the conflict of interest…
VW often used Porsche engineering capacities in the past. Your example, the 924, was developed by Porsche for VW mainly using VW parts. Porsche was very much depending on these developing contracts from Wolfsburg, because back then they lacked the critical mass to autonomously fund fundamental research and engineering needed for 70s US emission and safety regulation (another example is the EA266 project which was developed by Porsche for VW to follow the Beetle and featured a weird layout with the engine below the rear bench). Only when VW didn’t want the 924 project, it was christened a Porsche. It later built the basis for all the 944-968 offspring, which kept the Porsche boat afloat until the late 80s, when the falling US-Dollar and high production costs almost killed them. Without the 924, Porsche would have run into possibly fatal problems much earlier.
So close cooperation with VW is nothing new for Porsche (especially considering the first 356s were lower, slightly faster Beetles) and most certainly not always bad for the brand.
And just because it is so popular nowadays to engage in some Piech-bashing: The guy is an engineering genius, he gave us pistondeads (amongst other things) the 917 racing Porsches that are a big part of Porsches heritage, he was responsible for the first Audi Quattro and managed to push the Audi brand to where it is now (eye to eye with Mercedes and BMW). This cannot be achieved in one day, and often includes small and big failures before ultimately succeeding. Just remember that before today’s A8 in the 90s there was an Audi V8, which was also ridiculed by competition and punters alike. So don’t write the Phaeton off just yet, maybe the second or third generation will prove Piech right.
Porsche is stubborn, they always have been. Whether or not the purchase of VW will be a good thing for them is yet to be seen but it is cause for concern if you are a Porschophile. I would hope that Porsche can inject some of their DNA into VW without cost increases to the models. I do see Audi and Porsche competing already along with Lamborghini. Perhaps Porsche could also learn from VW or Audi. Why is the 911 the quintessential Porsche model when the Cayman S (with a much better turbo engine) could be so much better? Porsche has a rigid hierarchy and even if it would make sense to give more power to another model they won’t.
P.S.: Robert, you forgot to mention one crucial advantage for Porsche dominating VW. Should the EU impose legislation that limits average per car CO2 emission for manufacturers (which is not unlikely), the VW lineup would prove very useful.
Typo correction to earlier post: Bruce Leven, not Bruce Level. And Bruce finished seventh, in that same race wherein which Doc Bundy finished second, each driving near-identical Porsche turbo-924s.
Replying to Vega:
P.S.: Robert, you forgot to mention one crucial advantage for Porsche dominating VW. Should the EU impose legislation that limits average per car CO2 emission for manufacturers (which is not unlikely), the VW lineup would prove very useful.
I don’t think so. Porsche could buy something else (such as subaru as I suggested) or create a low-end brand such as Smart/Scion. VW is simply TOO large for that purpose.
And are you sure that works? As of now, Porsche pays millions of dollars of gas-guzzler’s tax every year in the USA. Why isn’t VW helpful? Is it because VW sold too few cars? Or because Porsche’s stake in VW is too low?
Vega is probably the closest to the truth on this one, as besides Piech’s meglomania, the most important factors are probably political. Because of the strange financial structure that VW had for quite some time (relating to Saxony’s ownership), the requirements for profits, especially that of the quarterly/fiscal year variety that confound many American managements, did not have to be the driving force. Try to develop those marvelous Audi interiors with the beancounters staring at you… Combine a new found need for profits (“stakeholders” vs. shareholders is fascinating), the flatlining European economies, the EU’s bureaucracy’s micromanagement, and the natural propensity of heavily socialist societies to favor the large, Porsche’s buyout can be viewed more as a means of self-preservation as anything else. While we here in America may view small, profitable and nimble as some sort of ideal, Porsche may be finding that trying to be an “Apple” is a tough row to hoe in moribund and statist Europe.
Yeah, the self-competition makes absolutely no sense, but my guess is that SEAT is gone in the near future, the economic reasons for the plants disappeared a while ago, and Piech may be crazy but he isn’t nuts, so Bugatti and some others might be let go. But, still, the Panamera? Oh god.
AndyR:
Audi TT 3.2 Quattro $43,675
Boxster 2.7 $46,460
Audi R8 $100k
Porsche Carrera C4S $99,460
Cayenne S $58,015
Audi Q7 4.2 $60,620
Panamera $125k – $175k (est.)
Bentley Continental GT $170k
Audi S8 $92k
Lamborghini Gallardo $175k
While I’m not suggesting that owners of these vehicles are looking at an either/or situation, am I the only one who sees a problem for one company making many models aimed at the same price point?
And let’s say Porsche wants to build another supercar, and Bugatti wants to build a lower price Veyron, and Bentley wants to keep building Continentals, and Lamborghini keeps building their stuff, well, who gets which engine, suspension and gearbox?
re: CSJohnston
April 9th, 2007 at 4:09 pm
“It was not so long ago…Porsche was almost bankrupt…Too many models…taking up too many resources…generating too little business. Solution? Discontinue everything and reinvest in the 911. Result? Porsche saved!”
my understanding as to the primary reasons why porsche was in such dire straights in the early 90s aligns well with yours. i would only add that the porsche models of that era were all quite old – relatively speaking – compared to those of their most challenging competitors.
but your statement regarding their solution – to “discontinue everything and reinvest in the 911″ overlooks one very salient point. a new 911, alone, would not be enough. which is why they simultaneously developed the 986. the boxster, with its lower pricing and component sharing capabilities would give porsche access to a broader, deeper market than the 911 ever had or would, and in doing so, was instrumental in ensuring the ultimate success of the new water-cooled 911 and, in fact, the entire enterprise.
the boxster, a resounding success in its own right, is the car that saved porsche then and helped position it to become the company it is today.
re: Steve_S
April 9th, 2007 at 5:02 pm
“Porsche is stubborn…Why is the 911 the quintessential Porsche model when the Cayman S…could be so much better?”
must be a marketing decision. remember, there are a whole bunch of babyboomers who literally grew up with the 911. they have always wanted one and now, many of them can finally afford one. and at current prices, there is way too much money to be made from selling them to these boomers, to leave any of it on the table.
but just watch, as soon as the boomer demand dries up, the 911 will be history.
philipwitak.
OK, I would agree with that. The Boxster has broadened Porsche’s customer base and it does not stray from Porsche’s core competency of building great all-around performance cars. It also retains enough of the 911’s design and layout traits (mid-engined, low-weight) to appeal to buyers.
However, while the 928 and the 966 (964? I can’t remember) were older models in the early 90’s they were still considered excellent automobiles and the brand name was right. By most accounts all of Porsche’s current lineup are also excellent. If Porsche faces a similar challenge as before, what gets cut, what stays and will they have the flexibility to maneuver if they are then attached to a larger corporate structure?
CSJohnston, I believe you are thinking of the overpriced and underpowered 968 (successor to the 944).
The 914 was marketed in Europe as a “Volks-Porsche” with chrome badges on the rear deck that said that; however, that didn’t make the 914-6 anything less. In fact, 914-6s are highly valued in vintage racing today, thanks to the fact that it had a Porsche engine, coupled with the low polar moment of inertia common to a mid-engine layout. A 914-6 has a Porsche engine and it is as real a Porsche as you can get, with all that means.
The mistake Porsche made was in taking on the 924, designed for Audi, as I recall hearing, and making it their own. Even with a turbo-charger it just didn’t have what it took to compete in the racing Porsche was committed to, at that time; and the damage to the marque was incalculable.
In the 1982 SCCA Trans-Am season, Doc Bundy, Brue Leven and Hurley Haywood, struggled to compete with Porsche turbo-924s that made just 300 to 400 horsepower at the most (and dropped 15 to 20 horsepower, during the heat of a race, without a boost knob to control same) against Pontiac Trans-Ams and Chevrolet Camaros. That led Bruce Leven and Hurley Haywood to drop out of Trans-Am. Doc Bundy worked miracles, coming in second with a turbo-924 at a race at Pacific Raceways in Kent, Washington, despite losing his clutch, in July of ’82.
But the 924’s poor showing in racing is probavly, as much as anything, what led to the 944’s creation. And the engine in a 944 is half of what was in the 928; so despite what some nits in PCA might feel, call it a “real” Porsche.
If Porsche does indeed take over Volkswagen, it might work, such the tail won’t be wagging the dog – as it did with the 924. My hunch is there might be more Volks-Porsches in the works, as a way of solving the problem of product duplication.
I have no major problems with this, as long as Porsche continues to focus on it’s sports cars. Once they lose focus, then it’s the beginning of the end for Porsche.
Robert, CSJohnston,
While I agree with your assessment that Porsche is strongest when it’s independent, I still think buying into Volkswagen is absolutely crucial for the company’s future. First and foremost, Porsche needs to secure its long-term production and development resources: the Cayenne, a cash cow if there ever was one, is basically a ritzed-up Toe-Rag (thanks, Jeremy Clarkson) with a better chassis and a Porsche drivetrain. That is, if you don’t go for the V6 base model, which is in fact a badge-engineered veedub.
Secondly, Porsche needs to stabilise its income situation. Right now, customers are happy to pay ridiculous prices for Porsches (their profit margin is in excess of $10,000 per car – look it up under “milking the market”), but they might get a tad irritated some years from now when Porsche has posted the fifth consecutive multi-billion-dollar record profit, selling only a few thousand cars per year. Eventually people will become aware that they’re being borderline ripped off.
Thirdly (and perhaps most importantly), future EU laws will be the death of independent gas-guzzler manufacturers like Porsche. The only thing Porsche sells that’s within EU carbon dioxide limits is key rings and floor mats. With Volkswagen, they’ll have a hundred Polos for each Cayenne they sell (and let’s face it, the Cayenne uses more dead dinosaur than the 100 Polos combined).
I think streamlining the product portfolio will be step two – hopefully, the Porsche efficiency sharks will get some sense into Mr Piech’s head.
The automaker’s obese brand portfolio is a disaster. VW, SEAT and Skoda battle each other at the low end
You are 100% right. In fact, VW intended to close down the whole SEAT operation in 1995 http://www.elmundo.es/2001/03/19/motor/970625.html
It is common sense: VW bought control over SEAT in 1986, with an intact Berlin wall. Back in 1986, Spain was a cheap European country. Since 1989 there are cheaper alternatives in Eastern Europe, and owning two budget brands (SEAT and Skoda) just makes no sense.
They are trying to reposition SEAT as a “sporty premium” brand, with little success (and they have Audi).
The current “buzz” about SEAT is plusungood http://www.google.es/search?hl=es&q=%22cerrar+seat%22&btnG=Buscar+con+Google&meta=
http://www.google.es/search?hl=es&q=%22cierre+de+SEAT%22&btnG=Buscar+con+Google&meta=
…SEAT workers and heavily Unionized.
Sometimes we get into the error of sweeping generalizations. German companies can't combine successfully is just not accurate. If chrysler didn't fall into the same truck suv glut that gm and ford did I would say the Germans did it. However, with the cost structure of the big three, it will be amazing to see if any of them come out of this intact. The one two punch to this mess in the US is the non-union and off shore competitors being able to work a "free Market" by legally taking advantage of a two tier system of cost structure (ie non union vs union plants) in the same marketplace. Of these too many competitors, honda and toyota, have gone the quality route, and the rest have gone value pricing ie. kia, hundai,suzuki etc. This leaves nowhere for the big three to hide. As each of these foreign competitors keeps doing what it does best and building on those strengths, the big three weaken. Who would have thought three years ago that huyndai could make a lexus fighter V8 for under 30K base price? Who would have thought ten years ago with their tin can econoboxes, huyndai would not go the way of yugo in the U.S.? When mercedes bought chrysler the US market didn't look anything like it does today. For everyone who would have predicted that, there were four pundits who could not have. I don't excuse the suv pickup truck mentality of the old big three, but no one of these companies is any better than the others in this area.
philbailey:
Join the PCA and you’ll see what I mean. Noses in the air and comments that that’s not a REAL Porsche.
Odd, the biggest jerks I encounter are usually 944 people. 911 guys are typically pretty cool. The nicest Porsche owner I’ve met has a 959 and a CGT (among others), and if anyone was going to be a jerk…
porsche is an unbelievable legend! i can`t believe they have been so legendary having such unbelievably narrow model range and amateur nuances inside out. until 996 came out unwillingly in 95 , the predecessor 911 was so badly disproportionate, with a small supertiny ass, that they had to muster for it an ubelievably ugly spoiler to cover the buttockless car.the interiors were so small, that rear benches wouldn`t even classify as child`s seat in USA. the interiors shone amateurism all over the place- primitive switches, half hidden speakers in door pockets, questionable plastics, thick rubber gaskets, and very narrow shouldered chassis( cutting weight ?). even today porsche has only 2 models- overpriced bugeye gt and carrera/ cayman /crocodile whatever. cayenne doesn`t count. it`s a pure vw that has been porschified by making cheaper interior with more expensive materials. vw dashboard and central console gives away a much more expensive look, due to narrow tolerances and sharp precise moulded parts that are fitted gaplessly. if porsche thinks their gap- rich steering wheel with polished aluminum is better, then they should think again. and this company has plans of byuing superbly professional vw? sounds like a trout chasing a leedsichthys.porsche maybe is a road devouring chicane finesmecker, but not a finesmecker of design , innovation or value. ( tyre pressure controller in audi costs 80 bucks, in a porsche- 600 bucks. what the heck. arrogance is a curse of a gupsy).
If this was a merger of equals, then, this move would have made a hell of a lot of sense. Porsche could concentrate on sports cars and expensive SUV's. VW could cut the Touareg loose and concentrate on making affordable everyday cars (What does "Volkswagen" mean in English, everybody?). Skoda could be their "econ-brand" range, for people who want a car and nothing else. Bugatti and Lamboghini could be left to their own devices (let's face it, if you're going to spend that kind of money, it'll be the name you're after and nothing else!). Audi could concentrate on taking the BMW/ Mercedes/Lexus market but still keep the TT as there will be a market for people who want a good sports car but can't afford a Porsche (this is where the Boxster and TT will have some overlap). Seat is the only one I can't find a home for. Maybe they could mould it into a niche player. They make cars which boy racers would love, but whether that would warrant a brand in itself is another story. If I pick a brand they could jettison, Seat would be it. But this is all academic. This is has got nothing to do with keeping supplies of parts flowing (TKA, Siemens etc are German car suppliers, are you telling me they can't strike a deal with them?). This, I reckon, has more to do Dr Piech trying to create a "Welt AG". Porsche is a small, cash rich company. So in one stroke, Porsche would spend some of it's money (making it less of a takeover target) and Dr Piech would retain a iron grip over the boards of the biggest Europe car producer and the most profitable car producer in the world. Trouble is, I can't see what synergy VW could do for Porsche. If Porsche controls VW then access to cheaper parts (bigger bulk buying) would increase the profitability of Porsches; VW on the other hand have a wealth of experience in diesel engines. Anyone fancy a Porsche 911 diesel? Hang on, a German on a power trip trying to create a "Welt AG" by acquiring brands? How is Mr Schrempp, these days…….?
I can certainly see RF’s point, the auto industry doesn’t have a good track record with this kind of merger. I’d probably say there’s a 60% chance this deal will go sour.
However, there is a lot to be gained here for VW, Audi and Porsche. IF they do it right. A perfect combination of Porsche management, Audi styling, and VW economy of scale is the stuff (corporate) dreams are made of. As others have noted, they’ve had a loose association for a long time, so this won’t be the complete shot in the dark the DCX merger was.
With a more formal relationship, they can set a “technology sharing” plan. New technology can be premiered at Porsche, then move to Audi, then finally VW. I don’t know if that would work, but it has potential.
Kind of off-topic, but I’m 25 and if I could afford a project car, it would be a 944. Something about that car has always grabbed me. I have no idea why.
Aeroelastic:
It reminds me of the old joke.
A guy goes to heaven. Loves it. He asks St. Peter how God created such a wonderful place.
“The French provide the food, the English provide the entertainment and the Germans organize everything.”
The guy nods. So what’s Hell like?
“The English provide the food, the Germans provide the entertainment and the French organize everything.”
On paper, the Porsche deal could be awesome. In reality, Piech.
I could use some enlightenment.
Could someone please point out whether the aforementioned porsche products actually made money? Did they hurt the image or otherwise have costs that arguably hurt the company?
I would propose that the only people who dislike Porsche dislike the 911 series. Like Jeremy Clarkson.
Also, how about the 928? That is the best comparo for the upcoming Panamera isn’t it?
Since I totally agree with the article I will have to resort to criticizing RF’s German – I think he meant either “Porsche’s Future mit dem Volk” or possibly even “Porsche’s Zukunft mit dem Volk”.
carguy:
Point taken. Title changed.
Robert,
You forgot to mention that that VW is also doing much of the development work for the upcoming Panamerica sedan, much like they did for the Cayenne.
But this whole thing has disaster written all over it. Porsche’s fat profit margins are based on their ability to take standard features and turn them into four figure option pakages. Unless they can cut in half the time it takes to make a Golf or VW buyers start ponying up for $3600.00 metalic paint or $185,00 wheel emblems VW is headed for major problems no matter who is at the controls.
Eventually there will only be a handful of auto companies. Individual brands will be as “individual” as Buick and Pontiac.
Very nice article. I think Piech’s role shouldn’t be underestimated. He has a huge ego and even though he hasn’t been Volkswagen CEO for 5 years, he’s now chairman of the supervisory board and still holding all the strings.
As RF pointed out, Porsche officials like Wiedeking claim that the main reason for their controlling stake in VW is to protect their interests, aka. using VW facilities and parts (something they’ve been doing for quite some time). Porsche claims that VW could attract raiders as soon as the VW Law is gone, since they could figure that the individual parts of VW are worth more than the whole lot, which would also jeopardize Porsche’s interests.
But that’s only half the truth. Piech wants to create his own monument. He wants his family to be in charge of Europe’s biggest automaker and he wants to challenge Toyota on a global scale.
I wouldn’t be as pessimistic as RF about Porsche though, as it’s Porsche who’s running the show. Porsche now dominates the supervisory board over in Wolfsburg, while VW hasn’t anything to say in Stuttgart. Wiedeking understands how Porsche works (after all, he’s responsible for Porsche’s resurrection) and he understands that Porsche can never make any compromises.
Another interesting theory concerning Porsche’s increasing stake in Volkswagen is that with the new CO2 reduction laws coming to Europe, Porsche might want to reduce its (naturally) high average CO2 emissions, by getting hold of VW which has a quite low CO2 average.