Porsche confirms new strategy - and a supercar
Want more crowd-pleasing 911s and fewer EVs? Porsche bends to will of the people with Sportwagenschmiede 35
Fair to say it’s been a tough couple of years at Porsche, with dwindling profits, falling EV sales and the ongoing 718 saga. Michael Leiters was brought in as Chairman to help steady the ship, and now we have his medium-term vision for getting Porsche back on track: ‘Sportwagenschmiede '35’, which translates as ‘Sports Car Workshop ‘35’. It’s as comprehensive as might be expected given Porsche’s predicament, aiming to ‘further sharpen and expand its sports car identity with new products and technologies.’ So expect more new cars, more special editions, more personalisation and, all being well, more money made for Porsche.
Albeit with fewer people - that’s the bad news. A Future Package (surely related to the VW Future 2030 plan) will see a ‘socially responsible reduction of 9,000 jobs’. We’ll need someone from HR to explain what a socially responsible job loss is, but the process has been agreed by union reps and includes ‘a commitment to secure the jobs of the core workforce until 2035.’ Which is less than a decade away, although given the rate of change in the industry right now it feels a long way in the future. Efficiencies have already been made, remember, with the sale of Bugatti Rimac shares; Porsche will also sell the MHP consulting division, plus shutter eBike Performance, Cetitec and Cellforce Group.
The Future Package will see management positions shrink by 40 per cent in the medium term, the workforce ‘in both direct and indirect functions’ reduced by a quarter, and with around 10 per cent taken off the overall personnel cost. Streamlining middle management aims to make Porsche ‘more agile and effective.’ If a decision has to be signed off by fewer people, it can be made more swiftly. And speed feels very much like the name of the game right now. A share programme is also coming for employees in 2028. Nothing like making you work hard for Porsche when there’s an additional financial incentive.
2028 is also going to be a big year for new Porsches under the Sportwagenschmiede ‘35 initiative, with the 718 EVs in their first full year of production. A new B-segment SUV is coming alongside the Macan Electric, too, with petrol and PHEV power. Porsche says that model is ‘expected to make a noticeable contribution to sales and profitability in 2029.’ You don’t say - no combustion Macan in the lineup for key markets has really hurt Porsche. And the (very) old car outselling the EV has made the customers’ preference abundantly clear. The new one can’t come soon enough.
After that we will get new options ‘primarily in the particularly high margin D and E segments’, and plenty of ‘em: Porsche wants its range to comprise about 45 per cent D- and E-segment in the medium term. So expect more 911s with gold bits and manual gearboxes, more cars coming from the Audi PPE (electric) and PPC (combustion) architectures, and a mid-engined supercar above the 911. Rumoured for a long time, the ‘development of a mid-engined super sports car platform’ has been confirmed. Just as importantly, the potential of an SUV above the Cayenne is also still being explored. There’s the Audi Q9 right there, after all…
However the Porsche product portfolio eventually looks, common themes will run through all of them. The nice ones for marketing - ‘emphasising the DNA of the 911 even more strongly across all model lines - as well as those that actually make money. ‘Value over volume’ is a phrase used a lot at the moment. So there’s going to be 20 per cent fewer variants in each model line (best get your Taycan Turbo Cross Turismo now) as well as a drive to both save development costs and sell each unit at a higher price. Buckle up, because we’re really only just getting started.
If you thought that four-seat GT3s, coloured air vents and personalised sill plates were a lot, then there’s plenty more where that came from. There will be ‘expanded individualisation options’ going forward, with Sonderwunsch given a much more prominent role (they want sales up sixfold!) alongside Exclusive Manufaktur and the Heritage-branded machines. And if that sounds a little bit too focused on Pepita rather than performance, Sportwagenschmiede ‘35 (you’ll get the spelling eventually) had also seen Porsche increase its stake in Manthey to 67 per cent. So expect more wild limited editions like the 25, track experiences and performance kits - we’ve had a Manthey Taycan, so surely nothing is off limits…
The intention of all this is to bump the average selling price of flagship Porsches - Turbos and GTs, presumably - by a figure in the region of 20 per cent while also being ‘underpinned by corresponding product substance’. It isn’t just asking more money for the same cars. Still, 20 per cent on something like a GT3 - which can already be specced to £200k fairly easily - promises to help the bottom line a fair bit given their popularity. Especially when combined with the streamlining in the production process. Reducing the number of variants offered will help, but a reduction in development costs for future cars of up to 20 per cent will be the big one. New Porsches will be created and made in less time, put most simply, thanks to expanded internal capacities and a ‘more modular development process’. Pure combustion, hybrid and electric powertrains will continue, the three-pronged approach set to bring ‘brand-defining combustion engine/PHEV drives as well as the next generation of battery technology’.
Material costs will be reduced thanks to more parts sharing - also known as ‘increasing synergies within the partner and group network’ - while also aiming to enhance the perceived quality of the cars. Which sounds tricky to say the least, especially given some new Porsches have already felt less sturdy than their predecessors. The ambition is definitely there at least with Sportwagenschmiede, and the shake-up was needed.
All this is to help move the Porsche break-even point below 200,000 units; i.e. make more from each car and then not as many need to be sold. Particularly if it costs less to make and sell them; as far as the latter is concerned, sales regions will be reduced from five to four, with ‘efficiency improvements’ - which sounds like job losses again - coming for distribution and sales. No part of the business is going to be unaffected by the sounds of it as Porsche aims to get out of this rut - it’ll be packed lunches and flasks to the office soon.
Medium term, Porsche wants operating return on sales of 10 to 15 per cent and ‘an Automotive net cash flow margin of 9 to 12 per cent’. Long term, the aim is for 15 per cent on the former and 12 per cent on the latter. Higher value creation per car means ‘cash generation is expected to increase at a disproportionate rate.’ Their words, not ours. So don’t be surprised if a few weird and wonderful Sonderwunsch 911s make it to the homepage sooner rather than later - there’s money to be made.
“We are pursuing a clear plan with our strategy Sportwagenschmiede '35. The ultimate goal is to further strengthen our unique sports car brand – across all model lines and with new, highly desirable models in particularly high-margin segments,” said Leiters. “Our strategy will lay the groundwork to make Porsche significantly more efficient, productive and profitable in three phases. At the moment, the main focus is on reducing costs and making the company more financially robust. We have already achieved some important milestones.”
Stage 1 is cost reduction…
Only to find that stage 1 becomes a perma-stage and stages 2 and 3 never see the light of day
I am sure Porsche knows what it’s doing, just like when Shingijutsu had to go in and save them the last time
If you have no clue what I am talking about - go read the famous article written when Wendelin Wiedeking was running the show
It makes for fascinating reading
Good luck to them - I can see a day when I will have to walk Porsche through the next ‘crisis’
Nothing new in the world
Both are new to the Porsche brand contributing to the higher sale volumes seen.
Both have horrendous stories of terrible reliability with shockingly bad customer service and dealer attitudes.
Neither will be returning to the brand anytime soon; charge 20% more all you want.
I guess the bottom line is spend Billions on more robots that don't complain, don't require holidays, and can work 24 hours a day non-stop.
Porsche has gone from very very profitable to very much in the dodo, thanks to one thing. The EU and those dim-witted Bureaucrats who think they know best.
Porsche killed the Boxster / Cayman and Macan. Cars they sold well and made good money on. Forced to spend tens of Billions developing EV's the majority of people still don't want.
The EV Boxster / Cayman killed then resuscitated, probably due to how much it cost to develop. Try to sell a few while they decide to bring back ICE versions. Good sales now lost. The EV will never sell in the quantities the ICE cars did.
The Macan. Killed their best selling car due to the EU. Now struggling to sell the EV in similar quantities. So, now frantically spending more Billions trying to develop a new ICE Macan and get it to market ASAP.
Porsches problems aren't bad management, it problems are due to being forced to follow EU rules that has let the Chinese car makers take over.
Everywhere I go now, it's Chinese cars. Going back many years, it was Fords and Vauxhall's everywhere. In recent years it was BMW's, Audi's, and Mercedes everywhere.
But thanks to the EU, tens of thousands of people have lost or will lose their jobs. How many will find alternative jobs, and how many will be left stuck on Benefits?
All in the name of Net Zero. All hail Net Zero !!
I guess the bottom line is spend Billions on more robots that don't complain, don't require holidays, and can work 24 hours a day non-stop.
Porsche has gone from very very profitable to very much in the dodo, thanks to one thing. The EU and those dim-witted Bureaucrats who think they know best.
Porsche killed the Boxster / Cayman and Macan. Cars they sold well and made good money on. Forced to spend tens of Billions developing EV's the majority of people still don't want.
The EV Boxster / Cayman killed then resuscitated, probably due to how much it cost to develop. Try to sell a few while they decide to bring back ICE versions. Good sales now lost. The EV will never sell in the quantities the ICE cars did.
The Macan. Killed their best selling car due to the EU. Now struggling to sell the EV in similar quantities. So, now frantically spending more Billions trying to develop a new ICE Macan and get it to market ASAP.
Porsches problems aren't bad management, it problems are due to being forced to follow EU rules that has let the Chinese car makers take over.
Everywhere I go now, it's Chinese cars. Going back many years, it was Fords and Vauxhall's everywhere. In recent years it was BMW's, Audi's, and Mercedes everywhere.
But thanks to the EU, tens of thousands of people have lost or will lose their jobs. How many will find alternative jobs, and how many will be left stuck on Benefits?
All in the name of Net Zero. All hail Net Zero !!
TX.
Porsches problems aren't bad management, it problems are due to being forced to follow EU rules that has let the Chinese car makers take over.
...
Legislation has been on the cards for ages.
Their product release was poor, wanting to do everything in house but not actually being good enough at it for modern vehicles. So a product that wasn't fully ready was released. The Chinese will only beat them if their product is better. If Porsche have allowed that to happen in less than a decade it's only Porsche's fault.
They also priced their product too high...so not sure how raising prices 20% is going to help them.
The Taycan is actually a great product, and in gen2 guise is free of most of the earlier wrinkles (my gen1 has actually been very good, but there are others who have the opposite experience... More often than not down to poor dealers - bad management again). But price increases plus perceived fragility are not good bedfellows.
IMO they need to stop fixating on high margins. The accountants may have saved them 30yrs ago, but their grip needs relaxing. Concentrate on engineering. When mistakes are made, don't lean on the customer to suck it up and residuals will then shore up.. Then you're on the right path.
ZEV will spread. The orange muppet over the Atlantic, and his influence, will be gone soon enough. Even Americans will baulk at massive fuel costs which seem likely to stay.
Once that market goes down that path fully, the biggest markets are all in the same boat. Trying to pretend that isn't on the cards is stupid IMO... So focusing on ICE with gold knobs on is not a solution. Creating great product is the only escape (and they do have the seeds of that already).
TX.
Currently the built in UK EV choices are:
- Nissan Leaf
- Mini Electric
- Rolls Royce Spectre
- Some Vauxhall vans
So not quite on the same level as Germany
The fact that theirs seems to be changing very frequently, witness the off again and on again Boxster/Cayman EV, means you get the impression there's a lot of self doubt and uncertainty at Porsche. There is very little in the new strategy which doesn't seem to be a continuation of what they are already doing of pushing of prices by offering more options and expensive personalization while dropping slow selling variants.
Must have taken them all of 10 minutes to develop....
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