Porsche stock takes a tumble (thanks Cayenne)
Discussion
The Cayenne has left it's mark on Porsche, and it's not over yet. History will record just what kind of an impact it will have, hopefully Ford won't end up owning Porsche.
Firstly, Porsche has tumbled from the top to third from the bottom on the 2004 JD Power Initial Quality Survey. This distinction falls "ONLY" on the Cayenne, as stated in the JD Power report. All those LeMans victories, all those SCCA victories, all those......are now being affected by the crappy quality of the "new SUV".
Secondly, Porsche stock has taken a tumble, down 3.5% recently.
Thirdly, in Bratslavia, where the Cayenne is assembled, they have labor problems.
Fourthly, the price of oil has risen to record highs, and a high powered V8 SUV weighing in at 5300 pounds just doesn't make much sense any more, tire wear is what people are now budgeting along with fuel consumption.
Porsche should have stuck with what they do well, building world class cars, and perhaps even introduced a new model, and stayed the heck out of the SUV market.
Greed will do funny things, even when they were "the world's most profitable car manufacturer". Sadly, their board of directors made a terrible mistake, motivated by greed rather than engineering philosophy and the search for excellence..
Dogsharks
Firstly, Porsche has tumbled from the top to third from the bottom on the 2004 JD Power Initial Quality Survey. This distinction falls "ONLY" on the Cayenne, as stated in the JD Power report. All those LeMans victories, all those SCCA victories, all those......are now being affected by the crappy quality of the "new SUV".
Secondly, Porsche stock has taken a tumble, down 3.5% recently.
Thirdly, in Bratslavia, where the Cayenne is assembled, they have labor problems.
Fourthly, the price of oil has risen to record highs, and a high powered V8 SUV weighing in at 5300 pounds just doesn't make much sense any more, tire wear is what people are now budgeting along with fuel consumption.
Porsche should have stuck with what they do well, building world class cars, and perhaps even introduced a new model, and stayed the heck out of the SUV market.
Greed will do funny things, even when they were "the world's most profitable car manufacturer". Sadly, their board of directors made a terrible mistake, motivated by greed rather than engineering philosophy and the search for excellence..
Dogsharks
Dogsharks - it does sound rather like you want the board to have made a mistake with the Cayenne.
Not that I want one you understand!
History hasn't even begun to tell us whether or not it was a good decision. Stock goes up and down all the time. Down 3.5% now could be up 10% by next June. That and a drop in the JDPower quality survey: no surprise - they're shifting much more volume than they used to and to customers who don't necessarily have the sort of marque loyalty that the sports cars purchasers have traditionally had.
I wouldn't start worrying about Porsche's future.
For now.
Not that I want one you understand!
History hasn't even begun to tell us whether or not it was a good decision. Stock goes up and down all the time. Down 3.5% now could be up 10% by next June. That and a drop in the JDPower quality survey: no surprise - they're shifting much more volume than they used to and to customers who don't necessarily have the sort of marque loyalty that the sports cars purchasers have traditionally had.
I wouldn't start worrying about Porsche's future.
For now.
From a personal point of view I also was disappointed when Porsche started making 4x4 lorries as it was far from their speciality market and they were clearly just jumping on the overall SUV bandwagon. Added to this, I dislike intensely the proliferation of SUVs used for suburban transport because I think that they are too dangerous for other road users.
Having said that, and despite the poor results in the JD Power survey, sales of their sportscars dropped last year and their profits were buoyed only by the number of Cayenne buyers. If this move allows them to survive as an independent car maker then something positive will have come from it.
Having said that, and despite the poor results in the JD Power survey, sales of their sportscars dropped last year and their profits were buoyed only by the number of Cayenne buyers. If this move allows them to survive as an independent car maker then something positive will have come from it.
As far as I know the Cayenne has lifted Porsche sales and profits dramatically outselling both the 911 and boxster combined. If anything this higher volume product is more likely to make Porsche a more attractive takeover target for the big players.
So financially, the Cayenne has been the best thing for Porsche since the Boxster saved it's bacon in the mid-90s.
So financially, the Cayenne has been the best thing for Porsche since the Boxster saved it's bacon in the mid-90s.
GreigM said:
As far as I know the Cayenne has lifted Porsche sales and profits dramatically outselling both the 911 and boxster combined. If anything this higher volume product is more likely to make Porsche a more attractive takeover target for the big players.
So financially, the Cayenne has been the best thing for Porsche since the Boxster saved it's bacon in the mid-90s.
Isn't there a Porsche majority shareholding in the hands of the Quandt familt that thus have the power to block any aggressive takeover bids? Vaguely recall reading something along these lines...
GreigM said:
As far as I know the Cayenne has lifted Porsche sales and profits dramatically outselling both the 911 and boxster combined. If anything this higher volume product is more likely to make Porsche a more attractive takeover target for the big players.
So financially, the Cayenne has been the best thing for Porsche since the Boxster saved it's bacon in the mid-90s.
So is Dogsharks or GreigM getting their facts wrong?? Or have I misunderstood completely?
shadowninja said:
As far as I know the Cayenne has lifted Porsche sales and profits dramatically outselling both the 911 and boxster combined. If anything this higher volume product is more likely to make Porsche a more attractive takeover target for the big players.
So financially, the Cayenne has been the best thing for Porsche since the Boxster saved it's bacon in the mid-90s.
So is Dogsharks or GreigM getting their facts wrong?? Or have I misunderstood completely?
Dogsharks is getting his facts wrong.
The drop in Porsche share price has absolutely nothing to do with the Caynenne.
Partially it's because the market don't like the companys decision to go it alone in developing a 4th line of car without a platform sharing partner, especially as the 4th line is going to potentially be a GT in the mould of the 928, which has traditionally been a low volume segment for most manufactuers. Newsflow in the stock apart from that has been almost unbelievably positive.
nel said:Come on Nel, I think you're not appreciating the full picture here.
Having said that, and despite the poor results in the JD Power survey, sales of their sportscars dropped last year and their profits were buoyed only by the number of Cayenne buyers. If this move allows them to survive as an independent car maker then something positive will have come from it.
Yes, global sales may have dropped but bear in mind both the Boxster and 996 were getting long in the tooth and due for replacement. Now we have 997 and 987 not far away. The Cayenne is a very profitable vehicle and because the development costs were shared by another party it means more money for development of the sportscar side of the company.
Would the Carrera GT have seen light of day without Cayenne money? I'm not so sure.
Greg
GregE240 said:
Having said that, and despite the poor results in the JD Power survey, sales of their sportscars dropped last year and their profits were buoyed only by the number of Cayenne buyers. If this move allows them to survive as an independent car maker then something positive will have come from it.
Come on Nel, I think you're not appreciating the full picture here.
Yes, global sales may have dropped but bear in mind both the Boxster and 996 were getting long in the tooth and due for replacement. Now we have 997 and 987 not far away. The Cayenne is a very profitable vehicle and because the development costs were shared by another party it means more money for development of the sportscar side of the company.
Would the Carrera GT have seen light of day without Cayenne money? I'm not so sure.
Greg
I thought I was saying much the same as yourself Greg, albeit in a nutshellised manner!? If sales of the Cayenne lorry tide Porsche through a weak period of sportscar sales and allow them to finance the development of even more hooneracious machines then I'm not going to complain (though the size of the market for fast tanks depresses me somewhat!).
Incidentally, I was reading a french car mags while having my barnet snipped at lunch time. Apparently all other car makers are astounded by and jealous of the margin that Porsche make on each car sold. They make 27 times the margin that VAG makes on each sale, despite VAG selling 5 million vehicles a year compared to Porsche's 79 thousand (ish). Time to negotaite harder with the dealers...
Daz, re. Quandt family, thank you, I stand corrected. I knew it was one of the kraut auto makers...in fact half of Porsche is owned by members of the Porsche and Piech families, so this may have the same effect in terms aggressive bid protection.
Saying the Cayenne helped diversify the Porsche portfolio by "boosting sales" is like comparing a high quality wool business suite taylor who also just took on a line of expensive polyester suites from Bratslavia, and found affluent polyester loving hicks to buy a lot of them.
So now Porsche is realigning it's focus from the best precision sporting vehicles on the planet, to the SUV driving public? In the US, the SUV driving public is generally thought to be "the worst" group of drivers on the road, trouble is now, "most" of the vehicles on the road seem to be SUVs.
Too bad Porsche didn't have a little creativity and produce something like the Volvo XC70, totally hybrid, totally innovative, in the Porsche road-going tradition, instead of "a truck". It would seem that people would die for a vehicle like that, coming from Porsche, as the XC70 is extremely well thought of, and it's not intended to be an "off road" vehicle, although it has awesome capabilities.
What the world got is a 5300 pound vehicle known for erasing tires and consuming lots of gas.
I agree with the comment, it's too soon to write the history on the Cayenne. However, this chapter isn't real impressive. The concept sucks, the quality sucks, the design basically sucks too. The price is high, but not as high as the price Porsche is paying in lost reputation. They've lost some of their reputation when the Japanese can do "just as good a job, and better" in the eyes of many of the SUV buying public, at a lower cost and less frequent trips to the dealer.
Dogsharks
>> Edited by dogsharks on Tuesday 26th October 15:03
So now Porsche is realigning it's focus from the best precision sporting vehicles on the planet, to the SUV driving public? In the US, the SUV driving public is generally thought to be "the worst" group of drivers on the road, trouble is now, "most" of the vehicles on the road seem to be SUVs.
Too bad Porsche didn't have a little creativity and produce something like the Volvo XC70, totally hybrid, totally innovative, in the Porsche road-going tradition, instead of "a truck". It would seem that people would die for a vehicle like that, coming from Porsche, as the XC70 is extremely well thought of, and it's not intended to be an "off road" vehicle, although it has awesome capabilities.
What the world got is a 5300 pound vehicle known for erasing tires and consuming lots of gas.
I agree with the comment, it's too soon to write the history on the Cayenne. However, this chapter isn't real impressive. The concept sucks, the quality sucks, the design basically sucks too. The price is high, but not as high as the price Porsche is paying in lost reputation. They've lost some of their reputation when the Japanese can do "just as good a job, and better" in the eyes of many of the SUV buying public, at a lower cost and less frequent trips to the dealer.
Dogsharks
>> Edited by dogsharks on Tuesday 26th October 15:03
A lot of the Americans I know (admittedly die hard Republican Floridians) have an SUV and a sportscar.
Badge snobbery maybe, but if you could afford to have a Porshce SUV...why not? Looks may not be to everyones taste, but at least when you're inside it, you don't have to look at the outside <smirk>
With regard to poor reliability, thats a cheap shot. RMS issues, anyone? Fix on fail, it seems. Expect a good deal of sympathy if Mr Porsche dealer has seen your car before. If not, tough.
Sorry, but build quality seemed to go awry post 993 IMHO. Sit inside a 993 and you feel it will survive a nuclear blast. Sadly, the same cannot be said for the 996/986, in spite of improved ergonomics.
Maybe the 987/997 is a step forward, I'm not qualified to comment as I've only sat in a 997 - briefly.
Badge snobbery maybe, but if you could afford to have a Porshce SUV...why not? Looks may not be to everyones taste, but at least when you're inside it, you don't have to look at the outside <smirk>
With regard to poor reliability, thats a cheap shot. RMS issues, anyone? Fix on fail, it seems. Expect a good deal of sympathy if Mr Porsche dealer has seen your car before. If not, tough.
Sorry, but build quality seemed to go awry post 993 IMHO. Sit inside a 993 and you feel it will survive a nuclear blast. Sadly, the same cannot be said for the 996/986, in spite of improved ergonomics.
Maybe the 987/997 is a step forward, I'm not qualified to comment as I've only sat in a 997 - briefly.
Marki said:
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Isn't there a Porsche majority shareholding in the hands of the Quandt familt that thus have the power to block any aggressive takeover bids? Vaguely recall reading something along these lines...
BMW
Thanks Marki - Daz has already corrected me - looked into it and it seems that half of Porsche is owned by members of the Porsche and Piech families, with ties all the way back to Adolf...
nel said:
nel said:
[
Isn't there a Porsche majority shareholding in the hands of the Quandt familt that thus have the power to block any aggressive takeover bids? Vaguely recall reading something along these lines...
BMW
Thanks Marki - Daz has already corrected me - looked into it and it seems that half of Porsche is owned by members of the Porsche and Piech families, with ties all the way back to Adolf...
that will teach me to read the whole thing before jumping in ,,, yeah the Quant`s ,,i would like to be on their Christmas gift list
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