Porsche's sporty ambitions

The sports car maker's new CEO wants to launch at least one new model every year

"We want to remain the world's most profitable car manufacturer," Matthias Mueller, Porsche CEO.

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Can the prestigious Porsche brand double its sales volume without tarnishing its vaunted reputation for performance? By 2018, Porsche CEO Matthias Mueller aims to boost annual sales to more than 200,000 units, up from 97,000 units in 2010. To do so, the 57-year-old executive will introduce at least one new

Porsche every year. Mueller, a former executive at Volkswagen AG, replaced Michael Macht as Porsche CEO last October. From 2003 to 2007, Mueller led VW subsidiary Audi's product development, then coordinated VW Group's overall product strategy. Mueller spelled out Porsche's various challenges in an interview with Harald Hamprecht, editor of Automotive News Europe.

What is your vision for Porsche in 2018?

Porsche is synonymous with sports cars – yesterday, today and doubtless tomorrow as well. In addition, in every other segment where we operate, such as with the Cayenne or Panamera, we always offer the sportiest vehicle. At the moment we are hard at work on our future strategy. And I promise you, it will contain a few exciting surprises.

What are your most important objectives?

We want to remain the world's most profitable car manufacturer – and build on this position.

Aside from your financial objectives, what are your goals?

We are going to raise the bar even higher in terms of customer satisfaction, employee satisfaction and product quality. Our efforts are embedded in our corporate strategy.

What are the greatest challenges facing your product strategy?

We will improve coordination between our model line product life cycles. Each year we want to celebrate a major event, namely bring a new Porsche to market. We are also revising and improving existing products and looking to see what would bolster Porsche's image in terms of healthy growth.

Can you reach the sales goal set by VW Group boss Martin Winterkorn of 150,000 units by 2015?

I think that if we do everything right we could even achieve that a bit earlier. Our objective is to have more than 200,000 units a year by 2018. But volume alone is not our goal. All that matters to us is qualitative growth.

How?

We will stimulate certain segments. The best example is China. We are currently in the process of cultivating the sports car market there. We use the Formula One circuit in Shanghai or Peking airport to showcase our sports cars to potential customers. I think that China is far from having exhausted its potential in the sports car segment.

What is Porsche's global sales target in 2011?

The minimum target we have set ourselves for 2011 is to beat the previous year's performance of 97,000 sales. We want to reach the 100,000-vehicle mark.

What are your biggest short-term challenges?

We are bringing the next generation of the 911 to market in autumn 2011. In the meantime, we will get the phasing out of the current generation exactly right. In parallel with that, we are working on the technical concept of the 918 Spyder and Cajun.

Let's talk about the 911 first. What objectives are you pursuing with the next generation of the Carrera?

I am thrilled that our engineers have managed to make a really good Carrera – the core of our brand – into an even better sports car. The new 911 will be the most successful of all time. I'm making that prediction to you right now. Averaged over the life cycle we want to sell 30,000 units a year. By way of comparison: In 2010 it was 20,000 – at the end of the life cycle, of course.

Will the 911 also be the model line leader when it comes to sales?

No, that's not achievable because the segment is simply not as big as an SUV or sedan segment. What is far more important to us is that we remain the market and segment leader.

What are you going to introduce in 2012?

First of all, we will have the 911 Carrera in 2012 in its first full year of production. After this market introduction, we will also launch the entry-level models of the Boxster and Cayman. But right now I would prefer not to tell you exactly when and which model will come first.

What new variants will there be in terms of body and drivetrain?

With the 911, we are up to 22 derivatives. We use this as an example for the other models.

The Porsche supervisory board has already given the green light for the 918 Spyder for 2013. What is the latest situation here?

The interest in the vehicle is enormous. A firm decision has been taken to produce this super sports car in our main factory in Zuffenhausen.

How big is an investment in a low volume series like that?

It was 120 million euros for the Carrera GT. Of course, the development of a new hybrid powertrain is extra.

Does this already include the development of the coupe variant?

No decision has been made on that yet. But it is certainly possible for our engineers to derive a coupe variant from an open-top version. Initially we have set ourselves the goal of bringing the limited series of 918 units of the Spyder to market.

In 2013, you will introduce the Cayenne's new little brother, the Cajun, which is based on the Audi Q5. Where are you going to build this SUV?

That hasn't been decided yet. We have looked very closely at Ingolstadt. But this would incur considerable one-off costs. An alternative is Leipzig, where to date we haven't had any body-shell plant or paint shop of our own. If the investment amounts for Leipzig and Ingolstadt are almost the same, we will certainly opt for Leipzig and develop our own location.

How much will this cost?

That will be a three-digit-million-euro figure. We will decide on where the Cajun is to be produced by the end of March.

What derivatives can we expect from the flagship Panamera?

The Panamera has been on the market now for one and a half years. The product life cycle is typically about seven years. To mark the halfway point, we have planned a product upgrade. The car will be given an even more sporty look.

And what variants are planned?

I can as well very well imagine a long-wheelbase version, especially for growing markets such as China and Russia. We also think that a plug-in hybrid concept would fit well with the Panamera.

Do you see potential for a cabrio or shooting brake?

There are a lot of ideas out there. Our designers and engineers have fantastic ideas, like a two-door Panamera that makes even more of a coupe-like impression, and so on. We're keeping all our options open. Currently, things are going so well with the Panamera that we're not in any hurry.

And what are your plans for 2014?

For 2014, I could imagine a legitimate successor to the Porsche 550 – namely a small mid-engine sports car. Actually I couldn't imagine a better name for a small roadster like that than the 550. But we're just in the assessment phase.

And Porsche has taken on responsibility within the VW Group for developing the “Mimo” – namely the mid-engine entry-level roadster?

Yes, we will develop the Cayman-Boxster line as the basis for other future sports cars.

What competitors do you see in that segment?

To be honest, very few. In another price bracket, there are models around such as the Mazda MX-5 with a segment share of just under 50 percent. We think that there is still a lot of room for Porsche and one VW sister model.

When will we see a supercar positioned above the 911 — the so-called Porsche 929?

Theoretically there is indeed still some space there. A 911 GT2 RS costs about 220,000 euros, the 918 Spyder will be significantly more than that. Between the two there is still a gap where Italian competitors are currently very active. We are investigating that in an in- house project. We will make a decision by the middle of the year.

Audi intends to invest 11.6 billion euros between 2011 and 2015. How much money will you invest in the brand and products?

Hold on, you can't compare the two of us. Every year we sell only a tenth of Audi's volume. As a small sports car manufacturer we have to preserve the Porsche spirit – and always be better, faster and slimmer than our peers.

In an era of global warming, how do you intend to safeguard social acceptance of your products?

We are planning a hybrid concept in each model line. As already mentioned, we're thinking about a plug-in hybrid variant of the Panamera. That would be the first of its kind in its premium sedan segment. With the 911, sportiness remains center stage. Thus we are planning a mild-hybrid variant (an automatic start-stop function) here at first.

When will there be a purely electrically driven Porsche?

That depends on circumstances. Should it become apparent by 2020 that 20 percent of all new cars will already be electrically driven then you can take it that Porsche will also be challenging for 20 percent of its sales with electric vehicles. But I'm figuring on a total EV share closer to between 3 percent and 5 percent by 2020. We are now almost over the initial hype before the business has really got started. But we are not closing our minds to this development. If by 2050 a manufacturer's average fuel consumption is not allowed to exceed 0.9 litres per 100 kilometers and the CO2 emissions per kilometer are at 20 grams then we have to prepare ourselves for this in good time.

At last count, you employed 13,000 workers worldwide. Your new flagship Panamera created 2,100 jobs. How much will you expand your work force to achieve your growth targets?

If we were to produce the Cajun in Leipzig, we will of course create new jobs. The Chinese dealer network alone will add another few hundred jobs to this in the next few years.

When might you produce vehicles in China and the United States?

In the long term, the VW Group plans to sell between 10 million and 11 million cars a year in the long term. Production capacities are currently at 7 million to 8 million. To meet the required capacity in the VW Group, we certainly have to build five to six new plants worldwide. We should of course be signaling our requirements in good time, otherwise we won't make it.

Porsche will produce vehicles in VW's Osnabrueck assembly plant. How many Boxsters and Caymans do you want to build there a year?

Osnabrueck will be used for overflow production starting in 2013.

Last year, the United States was your largest single market, followed by China and Germany. Will China overtake the United States as your largest market?

I am assuming that our ranking will change. It is likely that in the short term China will become our largest market worldwide, thereby supplanting the United States. But the United States remain one of our most important markets, which we are doing a great deal to cultivate.

Other luxury sports car brands are struggling for market share in a segment that is not infinitely expandable. How many luxury brands will disappear from the market by 2018?

Everyone is anticipating brand consolidation in the car market. When I look around me at fairs such as the Geneva auto show there are new small brands popping up like mushrooms all the time. A number of established brands will certainly not have an easy time of it in future. You really don't have to worry about Porsche. We are one of the very few manufacturers that can combine a high degree of exclusivity with commercial success.

What are the Porsche brand's unique selling points? And what should we expect from your new brand strategy?

Porsche builds excellent vehicles – and aims at offering the sportiest model in the segment in question at any time. That is our credo. We are highly innovative and provide our customers with a ready-made outlook on life along with the car.

How will Porsche carry out its market strategy with a new-look management team? In recent months, five of Porsche's six executive board members have been replaced.

We are lining up on the starting grid with an experienced team that is an ideal blend, not just professionally but in terms of personal chemistry as well. We have six executive board members and 40 department heads. The departing executives were replaced by outstanding people, mostly from within Porsche's own ranks.

How will Porsche coordinate its product development activities within the larger VW Group — especially with regard to Audi and Lamborghini?

We have taken over responsibility for developing the future sports car module. In addition, we are responsible for sporty sedans with rear- and all- wheel drive. And there are two other groupwide fields for which we take care of: lightweight construction and engine expertise.

Which sporty sedans will be included?

For example, it would include the Bentley Continental and the Lamborghini Estoque, which we have already seen as a concept. But no decision has been made here yet.

When will you get back into a high-profile motor sports such as DTM or Formula One?

A motor sports strategy has to exist from the ground up. Porsche is far and away the most successful brand in the brand cup arena. This is where we reap the greatest enthusiasm while having a profitable business at the same time. This is what we want to nurture and develop. I have a very critical stance toward Formula One. Long-distance and endurance motor sports seems to me to be far more attractive. Audi is very active here and will not want to relinquish this position. But that's the way things are for us as a successful Group. The fact is there are only four attractive categories – but we have 10 brands. That means that we may have to compete against a sister brand at Le Mans.

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