Big strides from Porsche Australia

PORSCHE Cars Australia (PCA) will this year eclipse its conservative mid-term target to reach 2800 annual deliveries by 2018 about four years ahead of schedule.

The car-maker got the ball rolling last year by cutting the price of various key models by as much as $36,300, which helped it set a new high water-mark of 1905 sales. In the preceding seven years, deliveries had stubbornly sat between 1025 and 1380 units.

But as good as 2013’s record performance was, Porsche will smash that figure this year.

So far, sales are already up 35.3 per cent, with deliveries growing from 590 sales to April last year to 798 at the same point in 2014.

Since the price cuts had yet to take effect at this point last year, there is every chance Porsche’s year-on-year growth could slow from May, but even if it only breaks even from now on, it would still deliver more than 2100 vehicles this year before the Macan even enters consideration.

Add to this figure the supply-restricted 800 Macans it will deliver this year (with 600 units sold already, not a great challenge), and it is not unreasonable to expect Porsche to nudge 3000 sales in 2014 – more than double where it was only two years ago.

Remarkably, about 70 per cent of these sales will be SUV models, though Porsche claims it will always have a 911 as its halo.

This progression matches neatly with its parent’s global expansion over the same period.

Porsche AG has an internal motto to build one fewer car than demand, but in fact its global cap of about 200,000 vehicles – a target it should reach this year, likewise four years earlier than worst-case projections – is much shorter of global demand than that.

Demand for the Macan alone from world markets is running at about double what the factory in Liepzig is capable of building, and Porsche is hardly going to cut production of the more profitable Cayenne or Panamera to accommodate more Macans in the roster.

Nevertheless, PCA expects to continue growing into 2015, albeit at a reduced pace, chiefly through a full year of Macan sales with a target of between 100 and 140 units a month.

This will be bolstered by a still relatively youthful line-up of key sportscars, with new hot variants such as the 911 Targa (July) and Boxster/Cayman GTS (Q3) on the way to keep interest and sales bubbling along, plus the imminent introduction around December this year of an updated Cayenne.

One could speculate that PCA’s sales figure stands to grow to 3500 or more next year.

Now the big question for PCA, according to recently appointed managing director Sam Curtis, is how far it really wants to grow beyond this figure, and if it is truly beneficial to chase numbers in the way many other luxury brands have started doing.

“If we’ve achieved our 2018 targets in 2015, what lies beyond that?” he said. “Are we then just chasing a bigger number? No, that's not the plan.

“We’ll look at the product portfolio and make responsible decisions as to what we do with that product range.

“In the big picture, under (global parent) Volkswagen there’s a slightly different approach to our business, but that's not to say we can’t make decisions on the ground in the markets.

“Volkswagen understands that, but its agenda is to be number one and they turn to brands such as ours where they see potential for increases.

“Doubling our sales was our target – and we’re going to achieve that – beyond that it will simply be organic growth.” PCA will grow its dealer network by one, to 13 sites, in early 2015 with a new facility in the Victorian suburb of Doncaster. Its network, including PCA’s two factory-backed Melbourne and Sydney centres, have spent $45 million upgrading in recent years in preparation for the Macan.

Speaking on his decision to join PCA last December from his position in retail for Mercedes-Benz Cars, Mr Curtis said his background in dealerships gave him a rounded understanding of the business.

“Having retail experience per se, not just Mercedes-Benz retail (is good),” he said. “I think at wholesale level you don't get too many CEOs or MDs that have retail experience ... and unless you've had that experience you really don't understand what the dealers understand about our business.

“Wholesale is more strategic, long-term, the decisions I make today affect the business in a year’s time. In retail the decision I make today affects things on the day and tomorrow you can reverse it, and that’s not the way I run the business.”