Article on Porsche in Barrons

[DANNOV]

For those of you who may be financially inclined there is an interesting article on Porsche in this week's issue of Barrons. In short it seems that some European institutional investors feel that Porsche has lost its way, i.e. the expectations for the Cayenne are way too high and the Porsche stock is vastly overvalued relative to BMW. Also, the Cayenne is priced 50% more than the BMW X5 and the market for expensive specialty autos is crumbling. At the same time, Boxster sales are falling. The article points out that in the last recession, Porsche sales fell 28% in 1992 and 37% in 1993. It should be noted that the big drops came after the 1991 recession, so there appears to be a lag factor. I got to believe that if Porsche sales slump, there will be quite a few 996's and Boxster's coming off lease that may not be easily absorbed by the market, except at lower prices. We could see a buyers market in late model used Porsches.