Panamera to be most exclusive Porsche

PORSCHE admits it has put its reputation on the line by launching an all-new model at the height of a global economic downturn.

But it still expects to average at least 20,000 annual sales over the life-cycle of the $270,000-plus Panamera, Porsche’s long-anticipated fourth model line, which made its world public debut at Auto Shanghai on April 20.

Porsche Cars Australia (PCA) is more wary of making public sales projections in the current economic climate, and has reduced its overall sales expectations for 2009, but concedes its planning was based on 200 Panamera sales a year.

That represents just one per cent of the global Panamera sales forecast, even though PCA’s slice of the global Porsche sales pie is traditionally more like 1.5 per cent.

In fact, Porsche’s Australian sales were down 16.2 per cent last year at 1157 sales, representing a paltry 1.2 per cent of the record 97,500 vehicles Porsche sold globally in its previous financial year. Worse still, sales are down 40 per cent so far in 2009.

Naturally for a vehicle with the highest starting price in the range, the Panamera will be more exclusive in Australia than the Cayenne (which found 534 buyers last year), as well as the 911 (358) and Porsche’s mid-engined model line, which attracted 275 sales in 2008, split almost evenly between the Boxster convertible (142) and Cayman coupe (123).

“Only a fool would try to predict what’s going to happen in our market in terms of car sales for the remainder on this year and even early next year, because what we say today in terms of numbers may be irrelevant tomorrow,” says PCA public relations manager Paul Ellis.

“But our planning is based around a couple of hundred units per calendar year for the Panamera – around 200 annually,” he said, adding that PCA expected its 2009 sales decline to “even out” to around a 30 per cent deficit for the full year. Globally, Porsche sales are down about 20 per cent this year.

Mr Ellis said Porsche had reduced its sales expectations in Australia to better match demand in a declining automotive market.

“We have amended our production to reflect the downturn and we’re not going to over-supply the market,” he said. “We will not be caught with cars stuck on wharfs this year, so we have scaled back the business accordingly.

“We’ve had very good and co-operative discussions with the factory, so we’re not going to be in a position where we’re forced to sell cars. We haven’t reduced our production a whole lot. (But) We’re going to supply the market with what the market needs and wants.” While the Panamera grand tourer arrives in Australia on October 3, its presentation to international media on the eve of this week’s Shanghai show was designed to underline the significance of China to Porsche. It was Porsche’s first model debut outside the US or Europe.

Globally, Panamera sales are expected to be split evenly between North and South America, Europe and the rest of the world, but key markets will include emerging regions like the Middle East, Russia and China.

The latter is now the world’s second largest automotive market and where some 7560 Porsches were sold in the company’s 2007/2008 fiscal year (up more than 145 per cent on the previous year), making China Porsche’s third most important market. Some 2000 examples of the Panamera – 10 times as many as in Australia – are expected to be sold in China annually from January 2010.

Australia may represent a tiny fraction of global Porsche sales, but it has long been one of the best-performing markets in market share – or penetration per capita – and in its financial contribution to its Stuttgart parent company.

PCA is understood to rate among the top three markets in the world in profitability, thanks to a relatively rich model mix that is expected to continue with the Panamera.

“Australia is a very important market for Porsche,” said Mr Ellis. “We might account for less than 1.5 per cent of global sales but our importance from a business standpoint is greater than that.” The entry-level Panamera S, pricing for which was announced in mid-February at $270,200, is expected to account for half of all sales in Australia over the model’s life cycle.

But the flagship Panamera Turbo is forecast to attract 35 per cent of sales – despite a $364,900 pricetag that, like for like, sees it narrowly undercut the top-shelf 911 Turbo coupe in positioning, which Mr Ellis says was coincidental.

“We didn’t really look at 911 pricing when it came to Panamera pricing,” he said. “We looked at the specification it offered in the segment in which it would be sold and that was the driving force when it came to pricing the Panamera.

The third variant to be available from launch, the $282,400 Panamera 4S, which combines the 294kW (400hp) 4.8-litre V8 from the S with the (twin-turbo 368kW, or 500hp) Turbo’s all-wheel-drive system, will comprise just 15 per cent of sales – in line with the 911 model split in Australia.

“With our customers at that end of the market, if you can afford the best, you buy the best,” said Mr Ellis. “Around 45 per cent of 911 sales in 2007 were top-end models – Turbo, GT3 and GT3 RS. We know that our customers will stretch to buy the best car if they can. It’s pretty typical in Australia with our cars.” He said that unlike high-series 911 sales, entry-level 911 sales were down. “What we’re finding is that with our customers, we might lose a 911 S (sale), but not necessarily a Turbo sale. They’re a little bit more committed at the top-end of town.” In Europe, the base Panamera S will be available with a manual transmission, while adaptive air suspension will be standard only on the Turbo, which as previously reported will feature an overboost function as part of the Panamera’s unique Sports Chrono package that includes launch control.

However, all Australian Panamera V8s will come standard with a segment-first seven-speed dual-clutch automated manual (PDK) transmission and air suspension, plus full leather trim, 18-inch alloy wheels and a fuel-saving idle-stop system, which Porsche says is a first with an automatic gearbox in this segment.

Key options will include adjustable ride height, larger wheels, various interior trim colours, ceramic brakes, reclining rear seats, and in another world-first, a speed-dependent adaptive rear wing for the Panamera Turbo.

In a typical ‘top-down’ model release strategy, the three-variant Panamera V8 range will be joined before October 2010 by a petrol V6 version powered by a Volkswagen-sourced 3.6-litre engine and priced above the 911 Carrera’s current entry-level price of $219,300.

The Panamera Hybrid will then emerge in 2011, powered by the same full parallel petrol-electric drive system that will be found in the hybrid version of the redesigned Cayenne next year.

The latter will be at least 350kg heavier than the 1770kg Panamera and has an average fuel consumption target of less than 9.0L/100km, but it is unknown whether the Panamera Hybrid will undercut 7.0L/100km and therefore be expempt from luxury car tax.

“We’ve said we will introduce a V6 variant of the Panamera and we will introduce a V6 hybrid version, but as is common practice, you don’t release all your models at once – we never have,” said Mr Ellis.

“With the product we’re talking about you tend to launch with your best foot forward first. The cars that will carry most of the halo effect, the image and the desire are the top-end models. At this end of the market you want to establish desirability in the market. Nobody needs to buy a Porsche. People want to buy a Porsche. It’s about desire.” Porsche AG’s executive vice-president – research and development, Wolfgang Durheimer, said the staggered Panamera model rollout strategy was necessitated by both marketing and engineering considerations.

“We’re following a top-down strategy. We come with the Turbo, we come with the V8, we come with the smaller engine, we come with the hybrid,” he said. “For us as a small manufacturer it is always important to have a story, to bring something new. We cannot bring everything at the beginning.” But Porsche admits there is a lot at stake.

“There is a risk,” says Mr Ellis. “When you’re building an all-new car and you’re creating an all-new segment you’ve got to get it right. There are no second chances.

“The Panamera’s importance can’t be understated. It needs to meet the needs of customers and critics. We made bold claims so we have to hit the bull’s eye. We are an engineering company, so it’s important for our reputation and our integrity.” Porsche admits it has chosen a bad time to launch a top-end luxury sedan, but is confident the Panamera will prove strategically important to it over its model life.

“We would obviously have been happy to introduce the Panamera in times of better economic conditions than we are currently experiencing today,” conceded Porsche AG executive vice-president of sales and marketing Klaus Berning.

“There can be no doubt about it: in the light of the global recession, the international automotive industry is facing a tough challenge. And regrettably not even Porsche is able to fully escape this negative development. Although, in operating terms we are set up better than many other manufacturers, we too feel the global slump in demand.

“We are, however, convinced that together with the Volkswagen Group we will not only master this crisis, but will indeed make a powerful restart into the market when things pick up again.

“In this process the Panamera will play a decisive role for Porsche. The new model ideally supplements our existing product portfolio made up of three model series, it will once again significantly expand out customer base, and the Panamera will give lasting and powerful momentum to the outstanding exclusivity of our brand.

“This will not only help us weather the current storm, but will also give us an excellent starting position when the market regains momentum.

“Introducing the Panamera, Porsche is aiming both at the segment of classic sports coupes, gran turismos and the luxury performance range. In economically good times this means a global market volume to the tune of approximately one million new cars sold each year. And we will now take our piece in this cake,” said Mr Berning.

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