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Decolliber Decolliber is offline
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Join Date: Jan 2001
Location: Iowa
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Originally posted by JackOlsen
The question Porsche has to answer is whether it's a luxury car maker or a sports car maker. If it's a luxury car maker, then the SUV is a reasonable idea and a sub-Boxster would dilute the brand. If it's a sports car maker, then they've diluted the brand and thrown away the Boxster profits on a go-fast station wagon in the same stroke.
I don't see why these two strategies should be seen as _inherently_ mutually exclusive, from an engineering or a marketing perspective. Mercedes-Benz has done very well, since the 1930s, selling both luxury cars and sports cars. The 300SL was no slouch, though maybe later SLs were more for the boulevardier. If there is a constraint on Porsche it is a financial one. Making about 50,000 vehicles a year gives it no economies of scale and its financial reserves are tiny compared to DCX. Development of the Cayenne has surely drawn corporate resources away from sports car development. And if the Cayenne flops in the market, Porsche will most likely be taken over, probably by its old friend VW, and be taken under the Audi division. VW may be spinning off Audi as a poison pill defense, as the EU is forcing GErmany to remove legal defenses against a takeover of VW, and an Audi-Porsche combine could make sense for both auto makers. Porsche shares are riding high now, but I expect much of that is stock market anticipation of Cayenne earnings. If the Cayenne fails, Porsche could be in as dire straights as it was in the early 1990s when it came close to bankruptcy.
John C
1988 911 Carrera coupe
2002 BMW 530
Old 03-07-2002, 08:19 PM
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