How the world’s most profitable car company will continue to dominate the

decade.

By Evan Yates

PORSCHE’S PACE

• In 2011, Porsche set forth an initiative to achieve 200,000 global deliveries in a single year by 2018 in addition to increased profitability and other prime objectives.

• Years ahead of schedule, Porsche not only achieved their sales target but surpassed it selling over 225,000 units globally (51,000 in the U.S.) in 2015. This early achievement wasn’t much of a surprise as Porsche’s global sales have increased roughly 18% every year since 2011.

PORSCHE’S PACE

• Technically, if Porsche were to continue on its feverish pace, 350,000 units would be achieved by their target date of 2018. Porsche is aware that the current spike will lose a bit of steam in 2016 and quite possibly flatten out in 2017 depending on a number of global factors particularly in the U.S and China.

• Maintaining exclusivity while maximizing profits is paramount to Porsche so a push for increased volume won’t exactly be in the cards, especially since they’ve already achieved their sales target. Either way, Porsche will still reach 300,000 units globally by year 2020 AND maintain their identity.

• Here’s how:

SUV DOMINANCE

• You simply can’t mention Porsche’s exponential growth without referencing their SUV offerings, as they’ve become the perennial breadwinners. The once-controversial Cayenne arrived on the scene in 2003 and after a few iterations; it’s been the brand’s top earner in recent years and sold over 73,000 units in 2015.

• Introduced in mid-2014, the Macan has become Porsche’s golden nugget as its first full year of sales (2015) resulted in over 80,000 units worldwide. In comparison, the Cayenne sold around 43,000 units in its first full year. And even though it would be naive to think the demand for both the aging Cayenne (which is rumored to see a full update fairly soon) and modern Macan would continue to increase at the pace they’re on, the Macan will still reach six-figure global sales numbers in both 2016 and 2017 - a figure never achieved by any Porsche vehicle.

SUV DOMINANCE

• On top of that, Porsche would be doing itself a favor adding an E-Hybrid, too. Porsche is primed for the Macan’s growth and the proof is in their 500 million euro investment into their Leipzig plant where the Macan is produced.

• Macan Sales Predictions:– 2016: 104,000– 2017: 113,000

• Cayenne Sales Predictions:– 2016: 75,000– 2017: 90,000*

*Assuming third-generation introduction

• To put that number in perspective, Porsche sold 97,000 units in 2010 - TOTAL.

• Selling 100,000 Macans in a single year will be achieved by virtue of the heightened global awareness of the model (some people still identify it as a smaller Cayenne) and the prospect of added variations and trim levels within the model range like the 911.

THE FLAGSHIP

• The latest Porsche 911 (991.2) have began hitting dealership showrooms and for the first time every variation will be turbocharged. And even though that may make a handful of petulant purists scoff and irrational journalists cringe, it excites those who are actually buyingthese amazing vehicles as they’ll see increased performance, improved fuel economy and additional standard features.

• In 2015, 911 sales were up slightly at just under 32,000 units (the highest since 2007) but could have been higher if a fresh adaptation weren’t on the horizon. The 911 flagship will likely never jump to 50,000 units a year and that’s by design as the executives at Porsche are very aware that the 911’s exclusivity is the key to the brand’s identity. Quality, performance and price will most likely continue to increase and that’s to be expected.

THE FLAGSHIP

• However, 2016 and 2017 could prove to be very interesting years as the 911 may see a substantial increase. With the 991.2 update and its benefits, sales could increase by up to 10 percent in the US and Europe but the most significant surge will likely be in China. Due to an engine displacement tax, vehicles are taxed in China up to 40 percent based on engine size. With Porsche lowering the 911 Carrera and Carrera S’ displacement to 3.0L (down from 3.4L and 3.8L, respectively) this qualifies the 911 to drop down into a considerably lower tax bracket saving roughly 13 percent. On a $100k car, that’s significant.

• Looking down the road, Porsche has indirectly confirmed the 911 will ultimately have a plug-in model but ruled out adding hybrid technology in the current generation 911. Threat of substitutes is growing slightly with the Mercedes-AMG GT S and the Jaguar F-Type R nipping at the 911’s heels. However, to a true Porsche 911 aficionado there is no competition and the performance and visceral experience of the 911 is in a lane all its own.

• 911 Sales Predictions:– 2016: 37,000*– 2017: 41,000*

*Highest ever for the 911

BLACK SWAN

• Another budding star on the horizon for Porsche that’s possibly being overlooked but will undoubtedly increase sales is the 2018 Panamera, which is rumored to be available towards the end of 2017.

• The first generation Panamera, which has been on the streets since 2009 as a 2010 model has received strikingly, mixed reviews since day one due to its polarizing styling. Even with its controversial appearance, the Panamera sells roughly 25,000 units per year with the majority being sold in China and the United States. These numbers virtually mirror the 911’s sales numbers.

BLACK SWAN

• Recent reports state the Panamera may arrive to the United States considerably after its European release, yet will ultimately boost the brand either way.

• Panamera Sales Predictions:– 2016: 20,000– 2017: 38,000*

*Depending on second-generation release dates

• For the new generation, Porsche seems to have addressed the aesthetic concerns and based on spy shots it seems as if the 2017 Panamera is a perfect blend of traditional Porsche, Audi A7 (mainly the rear, which is what needed to be “fixed” on the Panamera in the first place) and a bit of Tesla Model S, to boot. Also, Porsche has confirmed the “shooting brake” wagon version, which is based off of the Panamera Sport Turismo concept.

• In the U.S. alone, Audi sells roughly 8,000 A7s and is also looking forward to a 2017 model change so the Panamera is evolving just in time to stay relevant in the segment. The Panamera could even steal a few thousand units from its German cousin if the revision is received well.

MID-ENGINE SIBLINGS

• Porsche has revived the 718 nameplate - a moniker used for their mid-engine, four-cylinder racecar also known as the ‘Giant Killer’ in the late 1950s and early 1960s, for the current Boxster and Cayman. The 718 distinction isn’t nearly familiar as the 911 RSR or 917 of the past which may prompt a potential buyer to search the history, ultimately developing possible interest.

• The Boxster and Cayman are now known as the 718 Boxster and 718 Cayman, respectively, and like the original 718, both will come equipped with a flat-four cylinder engine, although the current model will be turbocharged.

MID-ENGINE SIBLINGS

• The 718’s power plant also shares (loose) ties with Porsche’s track-proven LMP1 racecar, the 919 Hybrid. The connection between the two starkly diverse vehicles may be a stretch but could certainly make a few potential owners more comfortable with the new, smaller engine.

• Since their introduction, the Boxster and Cayman have certainly carved themselves a neat little niche as every production year they’ve grown into a respectable entry point to the Porsche family at a considerably lower premium. The further separation between Cayman/Boxster and their bigger brother, the 911 is also a positive for Porsche as the lines between the two platforms were beginning to blur.

• Porsche has averaged 23,000 Cayman / Boxster units per year the last few years. It’s too early to say if the new initiative will create a wash losing as many six-cylinder customers as it gains in four-cylinder fans.

• Yet with the enhanced suspension, updated styling cues and increased fuel economy, the 718 could prove to be a big winner. And of course, being a Porsche it’s nearly certain the 718s will perform masterfully. Journalists will get their hands on them and rave, blogs and forums will follow suit, and the nameplate could see a considerable bump as it did in 2013 when sales nearly doubled from the previous year. With the base Boxster starting at $56,000, that’s a great entry point into an outstanding brand.

• 718 Sales Predictions (combined):– 2016: 25,000– 2017: 30,000**Highest sales ever

ROLLING EXPERIMENTATION

• Racing is ingrained in every fabric of Porsche’s DNA as it’s the focal point of the brand’s identity and foundation since Day One.

• In 2014, Porsche made its triumphant return to the WEC racing circuit with their 919 Hybrid, a car built from scratch after only two years of research and development. The 919 Hybrid project was a complete success dominating the scene in 2015 with a triumphant victory at LeMans and ultimately becoming FIA World Endurance Championship Manufacturers’ Champion 2015 and winners of the FIA WEC Drivers’ Championship.

• Not to mention, the Porsche 911 RSR took all three GT Championships and the overall win for their performance at Petit LeMans 2015.

• Victories of this caliber aren’t just for the fanfare, they also feed technology, knowledge and experience down the pipeline to each and every production Porsche model.

• The 2016 season has just begun and Porsche hasalready made it to the podium where it belongs!

E-PERFORMANCE

• Unbeknownst to most of the world, Porsche has its finger on the pulse of hybrid performance and has been positioning the brand to be atop the luxury E-Performance segment. Created in its Weissach “think tank”, the 919 Hybrid racecar is what Porsche thinks of as a “rolling research laboratory”.

• The 919 Hybrid utilizes a 2.0L four-cylinder turbocharged engine combined with a battery-based hybrid system ultimately producing almost 1000 horsepower. The 919 Hybrid also recaptures electricity via braking and exhaust energy recovery systems.

• The Porsche 918 Spyder supercar is said to be “Porsche’s collected knowledge, in one car.” It uses a 4.6L V8 combustion engine in conjunction with two electric motors resulting in almost 900 hp while getting over 20 mpg.

• Both the 919 and 918 have provided the company with an abundance of data and expertise that ultimately trickles down to current and future hybrid and all-electric models.

THE FUTURE

• On top of that, Porsche announced in late 2015 that their Mission E concept car would be the basis for a future model available by 2020.

• Porsche has made bold claims for this vehicle, such as a zero-to-62 mph time of less than 3.5 seconds, 310 miles of electric range and 600 HP. In addition, Porsche is taking it a step further making claims of 15-minute 80% charge, which would result in 250 miles of range via an 800-volt system as opposed to a 480-volt.

• Porsche is investing over one billion euro into the project.

PORSCHE’S PACE

• As Porsche’s former CEO and current Chairman of the Executive Board, Dr. Oliver Blume said, “The number of vehicles that we sell is only of secondary importance to us.” With that in mind, Porsche has played the growth game flawlessly. They’ve introduced new models and haven’t upset their base, nor has their production quality suffered. If the SUVs and sedans haven’t bruised the brand by now, it’s certainly not going to happen.

• This means Porsche can quietly sell 160,000-200,000 SUVs per year as long as their flagship 911 remains exclusive and innovative. Thankfully for Porsche, people are still buying 911s - they’re just making room in their garage for Macan’s, too.

SOURCES

• https://newsroom.porsche.com/en/products/porsche-mission-e-concept-car-festival-automobile-international-paris-12177.html• https://www.pca.org/news/2015-07-31/porsche-opens-leipzig-expansion-macan-production• http://press.porsche.com/news/release.php?id=741• https://newsroom.porsche.com/en/company/porsche-delieveries-sportscars-record-year-2015-12149.html• https://www.autonews.com/article/20150831/RETAIL07/308319988/porsche-dealers-looking-to-leverage-posh-new-atlanta-experience-center• http://www.autonews.com/article/20140816/OEM/308189984/porsches-record-sales-could-endanger-exclusivity-tech-leadership• http://www.wsj.com/articles/porsche-ceo-sees-stable-operating-profit-in-the-next-few-years-1452708040?mg=id-wsj• http://fortune.com/2016/01/15/porsche-electric-tesla/• http://www.bloomberg.com/news/articles/2016-01-11/porsche-predicts-slower-2016-sales-growth-after-boost-from-macan• http://www.motorauthority.com/news/1100020_porsche-mission-e-is-a-mid-size-electric-sedan-with-310-mile-range-15-minute-charging-video• http://flatsixes.com/uncategorized/porsches-worldwide-2015-sales/• http://www.germancarforum.com/threads/porsche-918-spyder.49588/• https://newsroom.porsche.com/en/company/oliver-blume-ceo-interview-porsche-design-911-12053.html• http://www.autoblog.com/2015/11/16/2017-porsche-911-carrera-first-drive-review-video/• http://www.autoblog.com/2015/11/30/porsche-911-turbo-s-official/• http://www.porsche.com/international/aboutporsche/overview/dataandfacts/• http://www.carscoops.com/2015/06/future-cars-porsche-reboots-2017.html• http://www.carscoops.com/2014/09/scoop-current-porsche-panamera-meets.html• http://www.goodcarbadcar.net/2012/10/porsche-brand-sales-figures-usa-canada.html• https://www.pca.org/news/2015-07-31/porsche-opens-leipzig-expansion-macan-production• http://press.porsche.com/news/release.php?id=741• https://newsroom.porsche.com/en/company/porsche-delieveries-sportscars-record-year-2015-12149.html• https://www.autonews.com/article/20150831/RETAIL07/308319988/porsche-dealers-looking-to-leverage-posh-new-atlanta-experience-center• http://www.motorauthority.com/news/1102173_2018-porsche-cayenne-spy-shots• https://newsroom.porsche.com/en/company/porsche-j-d-power-customer-usa-awards-12178.html• https://newsroom.porsche.com/en/products/porsche-mission-e-concept-car-festival-automobile-international-paris-12177.html• http://www.autonews.com/article/20160201/OEM02/302019992?template=mobile&X-IgnoreUserAgent=1• http://www.leftlanenews.com/spied-porsche-panamera-shooting-brake-90921.html• All photos: Porsche