THE AUTOEXTREMIST
Tuesday, April 21, 2009 at 07:31AM April 22, 2009
Porsche closes the book on its past, with a resounding thud.
By Peter M. De Lorenzo
Detroit. What a defining moment in history we find ourselves in. After a century-long run as an American corporate icon, GM is on the ropes and under the tightening control of its Washington overseers. Chrysler is living on borrowed time while waiting to be either taken over by Fiat, or parceled out among various auto companies after its descent into insolvency.
Toyota’s run as the global automotive juggernaut is suddenly over almost before it even really got started, and now the Asian giant is struggling to fight its way out of its shockingly ill-advised foray into overexpansion - and smug overconfidence - while losing money hand-over-fist, just like everyone else.
Honda - ever content to go its own way - is finding that its way of doing business is turning out to be the most positive way, much to the chagrin of Toyota and Nissan.
And that’s just the beginning.
The Hyundai conglomerate is making inroads in markets around the world - particularly in the North American market - where it’s slowly but surely becoming a force to be reckoned with in a burgeoning number of segments.
And as ironic and unfathomable as it seems, the VW group is now breathing down Toyota’s neck as the global automotive sales leader.
But the most fundamental shift of all for the entire automobile industry is occurring right before our eyes. Thanks to the monthly sales figures that continue to grow, the Chinese market is now the most important auto market in the world, while the North American market continues to fade in importance as this country’s economy teeters between the brink of salvation or destruction, depending on whether you see the glass half-full or half-empty.
What does this mean? It means the Chinese market will probably be the biggest automotive market for the rest of this century, as there isn’t another market in the world even close in terms of its size and potential.
That’s a lot to grasp when you realize that the automotive industry has been rolling along relatively predictably for the last 50 years or so, especially in this country. We’re not only moving toward a future where the epicenter of the car business will be in the Far East, but it will be contested by only a handful of automotive conglomerates, as Sergio Marchionne, the Fiat CEO has suggested. His list? One American car company, a German player, the continued French-Japanese combination of Nissan-Renault with extensions possibly in the U.S., a Japanese player, a Chinese player and a European player.
My list is similar. I see one American car company, a major German conglomerate consisting of the VW Group (with a sub group consisting of a BMW-Mercedes-Benz combination), a major Japanese conglomerate consisting of Toyota’s interests, a French-Japanese-Italian conglomerate consisting of a combination of all the French manufacturers united into one entity along with Nissan, Honda and Fiat, and a major Chinese conglomerate.
What this will do to the world’s brands is worth talking about, because it should be fairly obvious that brands that are strongly positioned going into this new era of globalization will fare well, while others that are having problems now are likely to continue to have problems, with the weak players becoming marginalized or falling off the playing field completely. New brands will join the fray, of course, but the existing strongly defined brands that have a foothold in China will continue to grow and achieve success in that market.
We’ve already seen eye-opening developments in the Chinese market that seem strange considering the existing stereotypes here. We only have to look as far as Buick - considered to be a solidly prestigious brand in China - which is exactly 180 degrees different from the negative “retiree” image attached to it in (at least in some quarters) here in the U.S. market.
And what about the prestige brands, specifically for today’s discussion, a brand like Porsche?
I’ve railed against Porsche management’s decision to build the Cayenne SUV for years, but they made piles of money off of them - for a while anyway - and proved me wrong, at least on their balance sheets. (It also reminded me that overestimating the taste of the American consumer public is a fool’s errand, but I digress.)
With China being the automobile market for the foreseeable future, there’s no question that Porsche has to be there, with bells on. Porsche has a golden opportunity to establish its credentials in this new market and craft its image for a new century.
So what direction will Porsche take?
Will it harken back to the singular vision and philosophy of its engineering genius founder manifested in its light and agile sports cars built unlike any other?
Or will it dial up its racing heritage, which at one point was the envy of most of the other car manufacturers around the world (Ferrari excluded, of course)?
How about none of the above?
As for the “singular vision of its engineering genius founder” angle, uh, not so much. After all, Porsche gave up that opportunity with the introduction of the Cayenne, a bloated blunderbuss of an SUV that had about as much genuine Porsche innovation in it as a pair of a usuriously-priced Porsche Design sunglasses.
What about the racing heritage thing? Highly unlikely, given that the appeal of racing still needs to be nurtured and developed from the ground up in China. Remember that racing, motorsport and high performance seem to curry little favor with the typical Chinese buyer who associates being driven as the ultimate form of motoring luxury and prestige, as opposed to gripping the wheel of a high-performance sports car.
What exactly will the Porsche brand stand for in China then?
I think we were given a very large clue at the Shanghai auto show this week when Porsche staged the worldwide debut of the first four-door sedan in its history, the Porsche Panamera.
As far removed from its founder’s philosophy as you can possibly get – at least without being a truck - the Panamera is an oddly configured sedan with a heightened roof line to allow more room in the back seat so wealthy Chinese owners can be driven around in them. (As a matter of fact, it is said the Wendelin Wiedeking, Porsche’s CEO, had to be able to sit in the back of the Panamera comfortably before the car’s ungainly humpback design would get the green light.)
So amidst the rapid change taking place in the global automotive market today we have another fundamental shift taking place right before our eyes, and it’s just as staggering to contemplate.
Porsche, which spent most of the first 60 years of its existence establishing itself as one of the most decorated auto manufacturers in the world and a company responsible for some of the most desirable sports and racing cars ever built - machines that at the company’s peak bristled with its founder’s original vision and philosophy - has begun to reposition itself for this new century in order to exploit the largest automotive market in the world.
The Panamera four-door sedan – or “Four, uncompromised” as Porsche describes it – not only marks the end of the historical legacy that once forged the reputation of Porsche, it’s a blatant repudiation of everything that its founder once stood for.
The Porsche that once built its reputation with lithe, lightweight sports cars that ran flawlessly and won countless competition events at racetracks all over the world is now gone forever. You can still get a glimpse of its soul at the company’s new museum in Stuttgart or at an American Le Mans Series race when one of its 911 racers go by, but that’s as far as it goes.
In its place is something that its leader, Wendelin Wideking, likes to refer to as “the most profitable car company in the world.” A mercenary, money-generating machine that can adapt, exploit, pursue and conquer new markets at will with its cynically and blatantly calculated concoction of faux “Porsche-ness,” packaged in increasingly grotesque design statements in order to cater to a buyer who has no clue about what the brand once stood for, let alone care.
It’s a brilliant brand strategy and one sure to pave Porsche’s future roads with gold, as long as hoary concepts like history, integrity and authenticity don’t get it in the way.
We are not only bearing witness to the turmoil that is upending the automotive industry as we once knew it with each passing day - altering its future and this country’s role in it forever - we’re watching a company formerly known for its heritage, its uncompromising vision, and its sheer will for excellence turn its back on its history once and for all.
Get ready for the “new” Porsche, ladies and gentlemen. A mad, soulless mishmash of design cues blended together with a dollop of hypocrisy and manufactured emotion thrown in for good measure.
Four, uncompromised?
Hardly.
No, it’s authenticity, simulated.
And a once-glorious company, compromised.
Thanks for listening.
(Photos courtesy of Porsche)
See another live episode of "Autoline After Hours" hosted by Autoline Detroit's John McElroy, with Peter De Lorenzo and auto industry PR veteran Jason Vines this Thursday evening, April 30, at 7:00PM EDT at www.autolinedetroit.tv.
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