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Brand value key for Porsche

Dial 911: Australian Porsche sales sky rocketed following the introduction of its Macan luxury SUV, but the company says customers buy the high-rider because of the flagship 911’s prestige.

Porsche prioritises profitability and punter peace of mind, not growth

Porsche logo14 Jun 2016

By DANIEL GARDNER

PORSCHE sales have skyrocketed to new heights this year, climbing 29 per cent to the end of May to put it on track for more than 5000 units for the full year, but the German sportscar marque claims its main focus is on maintaining customer satisfaction and loyalty.

Since 2009, when it recorded 1025 new registrations, the iconic brand’s Australian sales have been an on upward trajectory and last year climbed 45 per cent to 4580 units, fuelled largely by the arrival of the Macan mid-size SUV.

This year’s growth is coming not just from Macan, but continued popularity of the Cayenne large SUV and an upgraded sportscar line-up.

While other brands set ambitious growth targets across as many segments as possible, Porsche Cars Australia (PCA) has taken a different approach, prioritising market share in its smaller repertoire of sports-luxury models, while retaining customers with strong resale values.

Speaking at the local launch of the new Boxster sportscar last week, PCA public relations manager Paul Ellis told GoAuto that the recent volume increase had been a happy by-product of a burgeoning range and not a deliberate goal.

“We don’t set ourselves volume targets,” he said. “We just need to make sure we have our market share in the segments we compete in on target. If that, in turn, brings the volume: terrific.

“A lot of our growth has been with the introduction of Macan but Cayenne is still selling very well. Last year was our best year for 911 since 2009 and we’ ve got a great Boxster and we’ve got a great Cayman coming towards the end of this year, so the sales will look after themselves because the product is there.

“We are not a brand that chases volume.” Mr Ellis said that company was not eyeing the possibility of 5000 annual sales in 2016 as a target or milestone, but was instead more focused on profitability.

“Growth is (important) but not growth for growth’s sake. Profitability is important for Porsche and keeping our dealers profitable. That’s really important,” he said.

“If the growth comes with that, terrific, but growth for growth’s sake is an absolute no no.” Unlike key rival Ferrari which buoys the exclusivity of the prancing horse with limited global production, Mr Ellis said Porsche was not concerned that too much expansion could harm exclusivity.

“The exclusivity factor doesn’t come into it. What comes into it is the loyalty factor,” he said.

Instead of exclusivity, Mr Ellis said that demand was the key to maintaining strong brand value for Porsche and the company was concentrating on ensuring vehicles retain resale value for customers.

“We need to ensure that there is always good demand for our cars, whether they be brand-new or, after three years, when a customer has a 911 and they want to come in at the end of the lease period and trade up to the next 911, they need to have enough equity in their current car not to be what we call upside down (worth less than what is owed on the lease),” he said.

“It’s about protecting the customer not just at the start, which is important, but also at the end of the ownership cycle. You can’t achieve that if there’s too many cars in the marketplace.

“We need to make sure supply and demand are level. In the ideal world you always have one car less than what you can sell.

“It’s all about making sure we can generate as much customer loyalty so once you own a Porsche, you can have faith you can own a second Porsche because you know you’re going to have good residual value in your car.” The supply versus demand equation is best demonstrated by the company’s Macan, which shot to the number-one spot of the Porsche range following its launch in 2015, and has sold 1076 examples to the end of May this year.

“We currently have an order bank of over 500 on Macan,” said Mr Ellis. “That’s come down from 1000 which is what it was when we first introduced the car, so demand is high but supply isn’t. That’s a nice problem to have, but in this case we would like more supply to help demand.” With such a warm reception of Porsche’s most affordable model, Mr Ellis explained that the company was not having to “play the discount game” and that customers paying the list price was having a positive effect on used Macan prices.

“Every one we are selling is being sold a full retail price. We don’t play the discount game, we don’t chase volume. That’s not how we go about business.” Mr Ellis explained that the popularity of its newest SUV was partly due to the Macan’s value and performance, but also thanks to the flag-bearing 911, which has forged the company’s reputation over 60 years.

“People buy the Macan because we build the world’s best sportscar in the 911. That’s the aspiration. You’ve got to have really good product. As long as we keep building the best sportscars – the 911 and the Boxster – that will create the halo and people will say, ‘That is a premium brand’.” Not all Porsche models have the same allure of the Macan to as many customers with potential supply outstripping demand in some cases, but Mr Ellis explained that with a good relationship with Porsche’s production facility, lower-volume models including the niche Panamera large sedan do not clog dealerships.

“We’re in run-out now with Panamera. If we can see that we are not going to be able to get natural sales we ask the factory to wind back our production allocation so we don’t get to the problem where we have cars on boats,” he said.

Mr Ellis would not be pressed to talk about specific figures or targets but said the brand was “going along just nicely” and that the success of other high-performance ranges was not a factor that Porsche considered when establishing sales benchmarks.

Mercedes Benz frequently sails close to Porsche’s registrations from one month to the next with its AMG line-up of driver-focused variants, but Mr Ellis said the company was not watching the fellow German brand’s movements.

“AMG does not feature in any of our plans or any of our targets. We can be categorical about that. We don’t like to measure ourselves pound for pound, car for car, sale for sale with any other brand, or any other sub-division of a brand. It’s absolutely of zero relevance for us.” With the continued popularity of its SUV range, a freshly launched Boxster and 911, forthcoming Cayman coupe later in the year and all-new Panamera in 2017, Porsche is expected to bolster its Australian sales momentum.

To date, the Cayenne is the number-two seller for Porsche with 670 registrations to its name, the venerable 911 has chalked up 202 sales while the Boxster (62) and Cayman (133) are expected to grow with the arrival of new versions.

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