Today's WSJ on the 997

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Taking Care of an Icon

Porsche Tries to Expand Sports-Car Sales
While Keeping 911 Aficionados Happy
October 4, 2004
A fortunate few companies succeed in elevating something they sell from mere product to cultural icon. Porsche AG is one of those companies, and the Porsche 911 is one of those products.

But it's not easy being the custodian of an icon. Change it too much, and the purists get mad. Don't change it at all, and it risks making the slide from icon to quaint curio. Driving along this fine line is the challenge facing Porsche as it launches a new 911, and tries to expand sales in the U.S. despite the recent slump in sales of exotic sports cars and a growing number of competitors trying to elbow into its rarified niche.

The bursting of the dot-com bubble was a big challenge for Porsche. A lot of dot-com "millionaires" turned their stock options into Porsche Boxsters and 911s in 1999 and 2000, pushing the company's U.S. sales to 22,407 cars in 2000. But after the crash, Boxster sales hit the skids, declining by more than half from the peak dot-com boom levels of more than 13,000 a year.

Meanwhile, sales of the fifth-generation 911, introduced as a 1999 model, stagnated as that car got older and some purists complained that its looks borrowed too much from the cheaper Boxster and not enough from the classic 911s of old.

During the past couple of years, Porsche's gains in U.S. sales have come entirely from the Porsche Cayenne sport utility vehicle -- a product that some Porsche sports car loyalists despise. Sales of Porsche's sports cars fell to 15,497 last year from 22,407 cars in 2000. Total Porsche sales rose, however, to 28,418 vehicles in 2003 thanks to the Cayenne. This is why Porsche executives aren't paying much attention to the caviling about the Cayenne. To Porsche, the case is clear: Without the Cayenne, their U.S. business would be in trouble.

But Porsche wants to regain momentum in its core sports-car business. Which is why Porsche is launching the sixth-generation 911, along with a more-aggressive campaign to woo a rising generation of affluent Americans into the Porsche sports-car cult. As part of this effort, Porsche recently brought some new 911s to an abandoned football stadium in Pontiac, Mich., and allowed a few reporters on the auto beat to drive them on the highway and fling them around a track set up under the big dome where the Detroit Lions used to play.

The new 911 is in certain superficial ways a retro car. The "new" look for the 2005 911 Carrera reclaims some of the styling cues of the classic 911s of the 1960s, starting with the oval headlights and prominent fenders front and rear.

Other changes reflect a recognition that wealthy American baby boomers are a skoosh bigger around than they used to be -- the car is wider, and equipped with more-comfortable seats. The car's interior has been upgraded to be more luxurious, and more user-friendly during morning and evening commutes. Not all the touches are perfect. Big chrome-look plastic switches on the steering wheel, designed to allow a driver to shift gears with his thumbs, look blobby and out of place. While Porsche is offering an optional Bose surround-sound audio system with 13 speakers, you'd need to keep it well cranked to overcome the road and engine noise in the cabin. This is a sports car, not a limousine.

It's stating the obvious to report that the new 911 is a great deal of fun to drive. Porsche claims the 3.6-liter, 325-horsepower "base" engine in the 911 Carrera, which starts at $70,095, will boost you to 100 kilometers per hour (62 mph) in five seconds. The 3.8-liter, six-cylinder engine offered in the new 911 Carrera S model, starting price $79,895, is rated at 355 horsepower and offers a potential for running 0 to 100 kilometers per hour in 4.8 seconds.

For cornering, there's a sophisticated active-suspension system available on the base model and standard on the Carrera S that use computers to provide either a comfortable ride for the weekday commute, or tighter, stiffer performance suitable for racing on Saturday afternoons. (And lots of Porsche owners race.) A stability-management system monitors the car and automatically applies brakes or reduces power from the engine when it senses that the driver has pushed the car past its safety envelope.

Does a Porsche 911 have more technology than most American motorists will ever need? Of course. But it depends on what you mean by the word "need." If you worry that spending more than $70,000 for a two-seat super sports car isn't practical, you're in the wrong room. The Porsche 911 is an outward symbol of a certain psychological state, not a way to get from point A to point B. People who enter that state "need" a Porsche.

Peter Schwarzenbauer, the president of Porsche Cars North America, expresses optimism that the numbers of Americans who will develop both the desire and the means to buy a 911 will expand, despite the short-term ups and downs of the stock markets and the end of the equity-bubble years.

"We have to look at how demographics are developing," Mr. Schwarzenbauer says. "Currently we have roughly 2.6 million households in the U.S. with household incomes of $200,000-plus. By 2012, we'll have 3.8 million households with income over $200,000."

In addition, the big bulge of the baby boom is entering its "Porsche Years." Porsche's target customer, Mr. Schwarzenbauer says, is a 46-year-old businessman who has worked hard, been successful and is now ready to reward himself.

A clever new Porsche television ad captures this emotion in a different way, with a vignette of a young boy marching into a Porsche showroom, and asking for permission to just sit in a 911. He then asks the salesman for his card and says, "See you in 20 years."

The problem for Mr. Schwarzenbauer is that he's not the only one who wants to tap in to the population of rich, middle-aged people yearning to own the objects of their youthful dreams. Mr. Schwarzenbauer pooh-poohs competitors who have taken aim at the 911, including the new Chevrolet Corvette, a forthcoming Aston-Martin priced to do battle with the upper end of the 911 line, and new cars from the reborn Maserati brand. But a few years ago, he wouldn't even have had to worry about such competitors.

Beyond that, a new Porsche has to compete with all the other ways that a wealthy person could spend money. This is a world in which vintage guitars sell for several times the price of a new Porsche 911, and old Detroit muscle cars fetch six-figure prices at auction. Dreams now come in many packages.

Mr. Schwarzenbauer says in the coming year Porsche will reach out more to potential customers -- instead of waiting for the customers to walk through dealership doors. Porsche plans to stage drive-a-Porsche events like the one I attended in Detroit for current and prospective Porsche owners. If your household is identifiable in some way as belonging to that $200,000-and-up income class and you live in a metro area, there's a chance you'll be getting an invitation some time next year to spend a few hours playing with a Porsche.

The idea that Porsche would have to search for customers might seem odd. Don't icons sell themselves? But that -- and the changes Porsche made to the 911 -- are signs that in the battle to win the business of affluent boomers, no one can take anything for granted.