Piech and Porsche

[Dottore]

There have been some really interesting articles in the German press this week about Porsche's future. Most interesting perhaps was in interview in Der Stern with both Ferdinand Piech and Wolfgang Porsche.

Now these two guys are cousins (both grandsons of Ferdinand Porsche), and both from arguably the two wealthiest families in Germany. Porsche sits on The Supervisory Board at Porsche, and Piech sits on the Sup. Board at VW - and is probably the most influential guy at VW.

Highlights of the interview:

-Porsche has been given the green light to acquire a majority stake in VW, and will raise it's shareholding to 51% during the course of this year.

-Once Porsche has 51% it will be the world 4th largest car maker after Toyota, GM and Ford. Porsche's clear target is to become the worlds largest carmaker. Toyota is the target. Both guys stated this repeatedly.

-This is really a family/dynasty thing as much as a business thing. There's been rift of sorts between the Porsche and Piech families for some time, and the acquisition of VW by Porsche is seen as an attempt to bring the two families closer together into the world's predominant automaker.

-Porsche will increasingly be just a brand. The new small Porsche SUV for example, if it goes ahead, will be entirely built from Audi parts. (Through it's 51% stake in VW, Porsche will effectively own Audi, Lamborghini, Bentley, Seat, Skoda, Scania, etc etc - and will have access to all of these parts.) Zuffenhausen engineered Porsches will become increasingly rare. (No more black Audi wagon jokes at Porsche meets?)

-Piech commented that the only vehicle still missing from the vast range under the (soon to be) Porsche umbrella, is a high end large displacement motorcycle, and that he is making this his next project. (He was very pis_ed, at having missed out on buying Ducati the late 1980's)

[Jared at Pelican Parts]

perhaps buying Harley?

[MRM]

Still no porsche minivan. I want a 6 seater Cayenne.

[osidak]

[legion]

Originally Posted by Jared Fenton

perhaps buying Harley?

Actually, that makes more sense than it might seem on the surface.

Porsche and Harley do a lot of development together.

[livi]

At this rate, sooner or later they will turn up in F1.

[cashflyer]

Originally Posted by legion

Porsche and Harley do a lot of development together.

You know... like, the entire engine.

[kach22i]

Will they be able to afford to fix all the engine warning light and rear main seal issues when they become big as Toyota?

[Aerkuld]

Originally Posted by legion

Porsche and Harley do a lot of development together.

Developing oil leaks?

[Drago]

Originally Posted by cashflyer

You know... like, the entire engine.

Actually, no; just the cylinder heads.

[MRM]

For the record, I will say that I think Porsche's plan is a bad idea. Porsche, Audi, Bentley, Lamborghini, the jewels in the crown are all high profit/upscale niche brands. VW is a mass market value brand. Ford and Toyota are mass market manufacturers that compete across all lines. I do not think that mass market manufacturers do well when they take over niche brands (such as Fords recent experience) and niche manufacturers don't do well trying to combine with other niche manufacturers to try to increase their combined size. Combining niche brands with mass market manufacturing is a recipe for disaster for both sides. It's one thing for Porsche to have an ownership stake in a mass market company and trade parts and technology. It is completely different to try to combine the companies. It is good to have ambitious goals, because if you aren't getting stronger you're getting weaker, but accomplishing that goal wil be the death of VW, Porsche and Audi.

[gprsh924]

Lamborghini has been making significantly better cars since they were taken over by VW.

[Dottore]

Originally Posted by MRM

It's one thing for Porsche to have an ownership stake in a mass market company and trade parts and technology. It is completely different to try to combine the companies. .

There is no suggestion of combining the companies, and I didn't mean to imply this. But there will be a lot of sharing of platforms, technology and parts in order to achieve better efficiencies. That's inevitable.

I don't think VW will be going under anytime soon. There are some pretty smart boys at the helm.

[pwd72s]

I often get flamed for saying this...but the "soul" of Porsche is gone. The bean counters rule...

[Dottore]

Originally Posted by pwd72s

I often get flamed for saying this...but the "soul" of Porsche is gone. The bean counters rule...

I'm not sure I'd agree with this - but certainly the days of 100% Zuffenhausen engineered, slightly eccentric cars with huge personality seem to be numbered.

But you could say the same about Ferrari. Times change.

And maybe the end result is even a better vehicle.

But what is seriously beginning to pi_s me off about Porsche is the rapaciousness of their pricing policies. It leaves a bad taste somehow, and I can't help feeling a little bit duped on my last purchase.

That, and I recently read a small book by Wendelin Wiedeking entitled "The David Principle" (as in David and Goliath). It was written in 2001 in German, but in this he goes on at some length about the beauty of being a small niche player, unbeholden to large conglomerates and the various stresses and compromises they entail etc. He stated emphatically then that Porsche would always remain independant of the large "commoditized" carmakers etc, and their small size would always enable them to remain nimble, creative and passionate about their cars etc etc. Yada yada yada.

Well what an unholy crock of bull crap that has turned out to be. But as I said, things change. He's pulling down upwards of 100 million a year now, and Porsche shareholders are rolling in money.

As Dylan says, "I used to care, but things have changed". A bit like you and I are thinking about Porsche these days.

[MRM]

I still think the plan is too ambitious. The soul of Porsche is gone and the beancounters are in charge. It's working for now the way they are. If they try to grow and aquire more companies and think they can apply the same magic, I think they'll destroy the companies and you'll see what happened with Jaguar and Land Rover with Ford happening to Porsche.

[pwd72s]

Originally Posted by Dottore

I'm not sure I'd agree with this - but certainly the days of 100% Zuffenhausen engineered, slightly eccentric cars with huge personality seem to be numbered.

But you could say the same about Ferrari. Times change.

And maybe the end result is even a better vehicle.

But what is seriously beginning to pi_s me off about Porsche is the rapaciousness of their pricing policies. It leaves a bad taste somehow, and I can't help feeling a little bit duped on my last purchase.

That, and I recently read a small book by Wendelin Wiedeking entitled "The David Principle" (as in David and Goliath). It was written in 2001 in German, but in this he goes on at some length about the beauty of being a small niche player, unbeholden to large conglomerates and the various stresses and compromises they entail etc. He stated emphatically then that Porsche would always remain independant of the large "commoditized" carmakers etc, and their small size would always enable them to remain nimble, creative and passionate about their cars etc etc. Yada yada yada.

Well what an unholy crock of bull crap that has turned out to be. But as I said, things change. He's pulling down upwards of 100 million a year now, and Porsche shareholders are rolling in money.

As Dylan says, "I used to care, but things have changed". A bit like you and I are thinking about Porsche these days.

The rule of biz...expand or die. Sad, but true...

[onewhippedpuppy]

I can't fault Porsche's investment in VW. Financially, it seems to be a smart move. Where I do find fault is the Porsche name being spread across the entire auto industry. Porsche has serious name recognition as a prestige marque. Lower priced, higher volume, "average" vehicles will chip away at their status as an aspirational brand. People don't pay 6-figures for a Toyota.