Porsche Has A Delicate Product Situation On Its Hands

The first-generation Porsche Cayenne may have been the brand’s savior in the 2000s, but its modern successor could be contributing to a challenging schism facing the company today. SUVs like the Cayenne and Macan are, unsurprisingly, its volume-selling models, but a report from the Wall Street Journal suggests those same vehicles are causing the brand to become less profitable (and prestigious), especially when faced with the modern trade challenges presented by the Trump administration’s tariffs on imported vehicles.

Some Flagging Profit Projections

According to the WSJ, Porsche’s stock price is down 21 percent so far this year, while Ferrari, a much more expensive brand, is actually up 8 percent. The news outlet suggests that Porsche’s reliance on cheaper, mass-market SUVs could be the problem, since those vehicles are much more susceptible to price increases. After all, a prospective Macan shopper with $70,000 to spend might suddenly realize that cash, which bought an S model last year, now barely covers the postage for an absolute base trim – suddenly, a hard-loaded BMW X3 may seem more appealing.

Part of the mass-market SUV problem is that Porsche views its status as a European automaker very important to consumers. While the X3, X5, and X7 crossovers are built at BMW’s plant in Spartanburg County, South Carolina, P-cars need to come from Europe to maintain their cachet – at least according to reporting from Motor1. Quoting Porsche CEO Oliver Blume, Motor1 said that the company’s German-made status is very important to American consumers – who, we’re assuming, are okay with the fact that Cayennes come from Bratislava, Slovakia.

A Case Of Mistaken Identity

Speaking of that Cayenne and its not-quite-German roots, Wall Street Journal posits that some of the problem comes from Porsche’s reliance on parent company Volkswagen for platforms and technology. The Macan Electric, for example, shares its Premium Platform Electric (PPE) with the Audi A6 e-tron and Q6 e-tron EVs, while the aforementioned Cayenne has a whole lot in common with vehicles as diverse as the European-market Volkswagen Touareg and the Lamborghini Urus. Those choices might drive economies of scale, but WSJ suggests that it also puts Porsche in a bit of an identity crisis. While its 911 sports car enjoys high demand, decent resale values, and plenty of owner loyalty, the more common SUV products can be the source of some reputational derision.

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Inventories are also down, and the full effects of tariffs still haven’t hit.

That said, what the article fails to account for is that Volkswagen also benefits hugely from Porsche’s engineering prowess. The aforementioned PPE was designed in large part by Porsche as a successor to the also-Porsche-developed J1 platform found under the Taycan and Audi e-tron GT. One could argue that Volkswagen products are improved thanks to the sports car division’s involvement, rather than more commonplace vehicles dragging Porsche downmarket. That tends to be our opinion, although to be fair, we’re just concerned that the Zuffenhausen-based manufacturer will listen to the naysayers too much and start building even more unobtainable products. Even today’s cheapest Porsche has the same esprit de corps as a vintage 911 Targa, after all.

Source: Wall Street Journal via Motor1