Although U.S. auto sales are up 17 percent through April compared with 2009 auto sales, Porsche's U.S. sales have grown only 3 percent. But Detlev von Platen, the CEO of Porsche Cars North America, expects sales to pick up when the redesigned Cayenne SUV and the V-6 version of the Panamera sedan go on sale this summer.
Porsche faces other challenges in the longer term, such as how to meet its federal fuel economy target of 41 mpg by the 2016 model year. That requirement may force the German automaker to develop new small and fuel-efficient models, a possibility now that the company is merging with Volkswagen AG. Von Platen says discussions are under way with VW about possible platform and technology sharing.
The 46-year-old native of Germany took over at Porsche Cars North America in April 2008. Previously he ran Porsche France for 10 years. Von Platen was interviewed in late April by Automotive News Staff Reporter Diana T. Kurylko.
Q: Why has your sales increase so far this year lagged behind the rest of the industry?
Von Platen: We are seeing the first signs of market recovery in the United States. The market was up 16 percent for the first three months, but we cannot see the same recovery rate in the segments where we are--especially the luxury sports-car and SUV segments.
Q: Why did sales of the 911 decline less than the Cayman and Boxster last year?
Von Platen: We have a market share of 25 percent in the segment for the 911, which is pretty strong. Our competitors are the Mercedes-Benz SL, Jaguar XK, BMW M3, and 6 series, Aston Martin and the Audi A6. We are clearly the leader.
Q: Why are the Boxster and Cayman lagging?
That segment--with the Audi TT, BMW Z4 and Mercedes-Benz SLK--dropped 40 percent in 2009. Its recovery is very slow. We do not see an increase in Boxster and Cayman sales despite our keeping our market share steady. We are still in a segment that is shrinking.
Q: What is your outlook for Porsche sales during the rest of this year?
Von Platen: Much will depend on the recovery of the segment. We are stabilizing or improving our market share for all our model lines except for Cayenne because we are at the end of the life cycle. We expect sales to at least be better than last year.
Q: How does 2011 look?
Von Platen: We launched the new Panamera last October into a completely new segment for Porsche, and we're about to launch the new generation of the Cayenne with a V-8 and V-8 turbo in the beginning of July. We expect to be strong in 2011, not only in the sports car but also in the SUV segment.
Q: You launched the Panamera when the market was at a low. How is it doing?
Von Platen: We are clearly exceeding our own expectations. In the U.S., we have sold 460 cars per month--more than 2,700 cars [through March] since we introduced the Panamera in October. We have only introduced the V-8 and V-8 turbo; the entry-model V-6 will come out in June. The other thing that makes us confident is that nearly 80 percent of those sales are conquests--they are new to the brand.
Q: How much of a boost do you expect when the V-6 Panamera goes on sale at its lower price point--about $75,000 before shipping?
Von Platen: We now have 11 to 12 percent of the luxury sedan segment, and we expect to improve our market share and volume. We'll sell 20,000 Panameras worldwide, and we expect our sales in the United States to be 5,000 to 6,000 cars a year.
Q: When can we expect the Panamera convertible?
Von Platen: This is something we may consider, but it is much too early to talk about variants of the Panamera. The Panamera hybrid has been confirmed for 2011.
Q: How do you expect the new Cayenne to fare? Sales totaled 7,735 last year, down from a peak of 18,117 in 2004. Will sales bounce back to 2004 and 2005 levels?
Von Platen: In the past seven years, we have sold nearly 300,000 Cayennes worldwide and close to 90,000 in the United States. We clearly expect to overtake these numbers with the new Cayenne. We have been able to reduce the weight of the car by 408 pounds. The new Cayenne is 30 percent more efficient than the last generation we launched in 2003, and the hybrid will be 20 percent more efficient than the gasoline [version].
Q: What kind of volume do you expect for the Cayenne hybrid?
Von Platen: We expect the mix to be 10 to 15 percent. We expect a similar mix with the Panamera hybrid.
Q: When will the United States get a diesel Cayenne--or diesels elsewhere in the range?
Von Platen: The diesel makes a lot of sense in terms of driving behavior and economy because it has a lot of torque and very good fuel efficiency. It needs to be a business case that makes sense with Porsche, and we are evaluating the potential in the United States. The decision should be made in the next few months.
Q: Could Porsche sell a smaller SUV? Is that a possible area for cooperation with VW Group?
Von Platen: We are looking at all kinds of possibilities for the future, and this is something we are also considering. We are not making our plans public at the moment.
Q: Porsche has long shunned incentives, but that changed last year when it offered low-interest financing for the Cayenne. Is this a new trend for Porsche?
Von Platen: We had to consider the deep meltdown of the market due to the crisis, and we had to do something to support our dealer network. We also decided to use more marketing funds to support local marketing. We did not join the club of those massively incentivizing. If you start with aspirin and finish with marijuana, you will have problems stopping.
Q: Will you continue to offer incentives?
Von Platen: We will continue to be attractive in terms of financing support. On the Cayenne V-6, we have a lease rate of $560 per month and offer a 1.9 percent retail finance rate.
Q: How will VW's ownership of Porsche affect U.S. operations? Do you expect to find economies of scale?
Von Platen: The merger between VW and Porsche will occur in 2011 as we have announced, and we expect strong synergies--especially on r&d and new technologies. We still have a long way to hybrid and plug-in technology. When we talk about platform development, we are in discussion with VW at the moment on sharing some platforms in the future between some VW brands and Porsche. The decisions may be taken within six months. Other synergies in IT, purchasing, and so on will help us to dramatically improve our position in this market.
Q: Under the new federal rules, Porsche must achieve a 41 mpg corporate average fuel economy by the 2016 model year based on the footprint of the vehicle segments in which it competes. How will you meet that standard?
Von Platen: We are in the process of assessing this rule. Porsche has been hit hard. Porsche and other low-volume manufacturers like Jaguar and Volvo, with yearly sales under 50,000 cars, will be eligible for what is called an enhanced lead time [giving them an extra year to meet the target]. This allows us to sell up to 250,000 cars over the next five years and to meet 75 percent of the footprint-based standard [in 2016] rather than 100 percent. But we still have to meet the regulation by 2017, and this means an average target of 41 mpg for Porsche. We have five to six years to consider all the solutions.
Q: Would it be easier for Porsche, as part of VW Group, to be combined with VW's fleet average?
Von Platen: We are acting independently at the moment. Our intention is to try to comply with the regulations on our own. Porsche has a responsibility to its customers.