Porsche sales jump out of gear

PORSCHE will cut a further 19 days of production this quarter to allow for a predicted 27.3 per cent sales slump in the first half, proving that even one of the world’s most profitable car-makers is not immune from the global automotive industry downturn.

The latest cuts are in addition to the 11 days already axed from the production schedule at Porsche’s main Zuffenhausen plant outside Stuttgart since December.

Porsche president and CEO Wendelin Wiedeking said at the company’s annual general meeting on Friday (January 30) that job reductions and a proposed shorter hours scheme were “not on the current agenda”.

Porsche’s official global sales and profit results will not be revealed until March, following the publication of figures by Volkswagen, in which Porsche holds a majority 50.76 per cent stake.

However, Mr Wiedeking said last week that despite a similar 27 per cent first-half sales decrease in the US, its largest single market, Porsche was well placed to weather the industry turmoil, and that the latest production adjustments were in line with its long-standing policy that “always produced one car less than the market needs”.

Porsche’s 6.4 billion euro ($A12.8b) operating profit for its 2007/08 financial year was up from 4.2 billion euro ($A8.4b) the previous year as the company sold a record 97,500 vehicles last year, but latest preliminary sales figures show Porsche this year will be further away from achieving its long-held goal of selling 100,000 cars in a single year.

The Porsche chief said that based on sales figures to mid-January Porsche would post a 14.3 per cent decrease in revenue to about three billion euro ($A6b) in the first six months of its financial year (August 1, 2008, to January 31, 2009), after a 27.3 per cent sales reduction to about 34,000 vehicles.

Porsche said the recently-facelifted 911 accounted for a higher share of its overall sales in the first half, following a “significant” decrease in Boxster sales globally.

Provisionally, the 911 found 13,500 buyers in the past six months (down from 16,263 sales in the same period in 2007/08), while the mid-engine convertible notched up just 3900 sales – down more than half from 9835 sales.

According to Porsche: “This reflects the market success of the new 911 models featuring highly-efficient Direct Fuel Injection and the Porsche-Doppelkupplung (PDK) double-clutch gearbox and the forthcoming changeover to the next-generation Boxster and Cayman with a natural effect on current sales figures.”

The upgraded Boxster and Cayman range go on sale in Europe in February, with Australian sales to follow.

The lauded German sportscar-maker described first-half sales performance of the Cayenne SUV, which it has long said would be the model that made Porsche “recession-proof”, as “steady” after about 16,600 global sales – down from 20,638 last year.

Porsche sales were down in all key markets, with the US falling from 16,209 to 11,850, Germany declining from 5630 to 4150 and sales throughout the rest of the world diving from 24,897 to roughly 18,000 in the first half of its business year.

In Australia, Porsche sales were down 16.2 per cent in 2008, when the Boxster was off 34.0 per cent (142 sales versus 215 in 2007), the 911 was down 31.4 per cent (358 sales versus 522), the Cayman fell 16.9 per cent (123 versus 148) and the Cayenne was up 7.9 per cent – 534 sales compared to 495 in 2007.

In addition to massive build rate reductions by General Motors, Ford and Chrysler in the US, Porsche is the latest in a procession of global car-makers to announce production cuts recently, including BMW, Bentley, Honda, Jaguar, Land Rover, Nissan, Rolls Royce and Toyota.

“It is fair to say that operating earnings in the first half of the year were down by the same extent as the company's sales,” Mr Wiedeking told shareholders on Friday morning, when Porsche Automobil Holding’s annual meeting was delayed by 30 minutes due to higher than expected investor interest. About 13,800 investors registered for the meeting, while last year 4800 attended.

Mr Wiedeking said Porsche would cuts costs by more than 100 million euros ($A201 million) this year, and that the company planned to boost its stake in Volkswagen to 75 per cent this year to eventually gain full control of the German giant’s finances.

“We wish to increase our share in Volkswagen in the course of 2009, given the necessary economic conditions, which are as you all know are anything but good at this point in time,” he said.

Porsche remains on target to launch its fourth model line in the Panamera four-door grand tourer later this year, following its global public debut at China’s Shanghai motor show on April 20.

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