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  • Porsche is one of the most revered names in cars. Asking

  • car enthusiasts to name the brands that best exemplify

  • excellence in engineering, racing and design. And Porsche

  • will be one of the names that comes up. It has a racing

  • heritage that can't be argued with. It has made at least one

  • of the most iconic sports cars of all time, the 911 and it has

  • a large following of deeply devoted fans born like many

  • German automakers, out of a deeply dark history, Porsche has

  • become a name respected the world over

  • Porsche vehicles are one of those examples where the

  • precision, the craftsmanship that goes into these vehicles,

  • and then how it's reflected in their performance, and what

  • they're capable of doing both at at race levels, as well as on

  • the street perfectly embodies that kind of stereotypical

  • German engineering,

  • but it is also a changing company. The once independent

  • firm devoted entirely to sports cars has become a brand within

  • the massive Volkswagen Group, a company with which Porsche has a

  • long history, and it is viewed as a kind of jewel in that

  • portfolio. Volkswagen has other luxury brands that range from

  • the high end to the exotic, but Porsche is responsible for about

  • 25% of VW passenger car profits. And while its fans may 1 think

  • of sports cars what really sell today are its sport utility

  • vehicles. This comes at Porsche is at another potentially

  • pivotal juncture, electric vehicles are coming and this

  • time they usually innovative and groundbreaking Porsche is

  • playing catch up. The automaker declined a request to be

  • interviewed for this story. Porsche has heritage loyalty and

  • a long track record of innovation competitive success

  • on its side, but it has built its heritage and its cars around

  • gasoline burning engines, how can it continue to succeed and

  • set sportscar standards in the electric age? The story of

  • Porsche begins with Ferdinand Porsche. He was an engineer Born

  • in 1875. in Bohemia, a region of what was then Austria Hungary,

  • and today is part of the Czech Republic, Ferdinand Porsche

  • secured his place in history when he became the designer of a

  • people's car or Volkswagen for Adolf Hitler. The car he

  • designed was called the type one but as widely known as the

  • beetle. The actual Porsche brand didn't form until 1948,

  • Ferdinand Porsche founded the company with his son also named

  • Ferdinand but nicknamed fairy, the first production car they

  • designed was called the 356. It had an engine borrowed from a

  • beetle and tuned for better performance, the vehicle had one

  • of the features that Porsche became famous for an engine

  • placed in the rear of the car. In the 1950s, Porsche began

  • making its own engines and improved the 356. It also made

  • the 550 Spyder a road racing car nicknamed the giant killer for

  • outperforming larger rivals, and the speedster, a stripped down

  • version of the 356. In 1958, the company built its 10,000 356

  • then, in 1964, the 911 the impression the 911, made on the

  • automotive world is tough to overstate. It is one of the most

  • iconic sports cars of all time. In keeping with Porsches

  • tradition, the 911 had an air cooled rear engine design, it

  • didn't have the biggest engine but was small, light and nimble.

  • Its starting price was $5,500. Today, a mere $46,363 a fraction

  • of the roughly $100,000 starting price of today's nine elevens.

  • Though Porsches were long known for their rear engine cars, the

  • company made front engine vehicles starting in the 1970s.

  • Porsche continued to make front engine cars until the 1990s when

  • it finally stopped producing them in order to focus on the

  • 911 and the Boxster. In 1986 Porsches global sales topped out

  • at about 50,000 units, sales in the US and Canada, which

  • together were then Porsches largest market had reached

  • 30,471, but they drastically fell to about 14,000 globally in

  • 1993, and just 3713 in the US and Canada. By the early 1990s.

  • Porsche was in trouble. The company turns to a group of ex

  • Toyota workers who had formed a consultancy to carry Toyota's

  • legendary manufacturing principles and techniques to

  • other companies. Toyota's production system famously

  • relies on reducing waste. needed parts are kept near workers and

  • things are only sourced or made as they are needed. The Toyota

  • engineers helped the German company slimmed down its factory

  • operations. The result was a car that was all Porsche but

  • significantly more affordable because of a factory capable of

  • higher volume production. And sales at Porsche began to climb

  • again US and Canadian combined sales were 5820 in 1994 6078 and

  • 1995 and 7524 in 1996. By 2000, Porsche was selling 22,412 cars

  • in the US alone, and a couple of years later, Porsche would

  • reveal a vehicle that would rock the automotive world. The

  • Porsche Cayenne. The Porsche Cayenne was a sport utility

  • vehicle and Porsche was a sports car company. Brand had only made

  • small roadgoing racecars As might be expected, purists

  • baulked, the common arguments were that Porsche was diluting

  • its identity and perhaps even selling out in the American auto

  • market. SUVs had gone from being purpose built vehicles for off

  • roading and the great outdoors to book your successors of the

  • family station wagon and minivan.

  • Initially, the move to two SUVs was was hotly debated. You know,

  • Porsche has a legacy of motor sports. It's very much in its

  • heritage. And certainly in the early 2000s when you think SUV

  • don't necessarily think Motorsports and the fear was

  • that, you know, since they share a lot of components with VW and

  • Audi, specifically, that a Porsche SUV would just be an

  • Audi with a Porsche logo on it. But that's not what happened.

  • Porsche very smartly decided to build SUVs that were more

  • Porsche and less, perhaps outtie. Over time, the

  • skepticism waned, though the Cayenne was an SUV, it was a

  • pretty high performing one.

  • I think it took the traditional Porsche enthusiast by shock.

  • What are you saying now we're going to build a four door SUV,

  • they designed it, they put it through rigorous tests, and I

  • drive a client as well. And I will tell you, it is the

  • sportiest SUV. If you take a two door versus a Cayenne of the

  • same year, yes, it's not going to be a 911. But I can tell you

  • it's going to be the quote unquote 911 of its segment.

  • In 2006, a Porsche Cayenne placed first in the trans

  • Siberia rally. It's a long grueling race that starts in

  • Moscow, Russia and ends in Ulaanbaatar, Mongolia, the

  • following year, Porsche Cayenne S vehicles placed first, second

  • and third in the race. In 2008. Cayenne SS took the top six

  • positions in the race. These vehicles were modified very

  • little from their stock condition, Porsche was able to

  • prove that Cayenne was not just a luxury SUV with a Porsche

  • badge, you could actually perform in challenging

  • conditions, the Cayenne and its smaller sibling the McCaughan

  • sold well, and SUVs now make up 60% of Porsche sales. In 2020,

  • the brand sold 57,294 units in the US alone, almost double the

  • high of around 30,000. Porsche saw in the 1980s when it was

  • still a pure sports car company,

  • early 1990s. They sold about 15,000 cars, you know, their

  • legacies, the 911 sports cars that's been built off of the

  • beaten to begin with, but then in the early 2000s, Porsche

  • found an interesting strategy of diversifying its customer

  • demographic, namely acquiring more female customers and

  • penetrating China, probably the most important auto market in

  • the world with SUVs, and today SUVs are about 70% of all

  • vehicles Porsche sells, so it's gone from about 15,000 units in

  • the early 1990s. Today, about 300,000 units, and SUVs are 70%

  • of those Automotive Industry

  • analysts say SUVs have not diluted the brand's identity 911

  • sports cars seem to have only grown more expensive in recent

  • years, they now start above $100,000,

  • the nine elevens and the other cars that Porsche sold have

  • actually maintained their price pretty well. And the reason why

  • is the SU v customer is a very different person that's buying

  • the 911.

  • This ability to weather challenges and overcome skeptics

  • owes something to the legions of Porsche fans around the world.

  • Many brands have their enthusiasts but Porsche inspires

  • a kind of loyalty and devotion that stands apart.

  • I was one of those Porsche people it was like, Okay, these

  • are not just incredible cars, but they're incredible.

  • Everything's You know, they're just incredible on so many

  • levels.

  • This can be a fascination that begins in early childhood and

  • continues all through life.

  • And so the aspirational car was always to someday have a

  • Porsche. And I set that goal as a kid. As a four year old on

  • every Christmas every birthday, it was like by the time I'm

  • let's say I'm 30 by time I'm 30, I'm going to have a Porsche like

  • that was the goal. That was the aspiration. And fortunately

  • enough, you know, at the age of 28, I was able to make that

  • happen with my 1987 911.

  • One manifestation of this might be the Porsche Club of America,

  • a club for Porsche owners that claims to be the largest single

  • Mark Car Club in the United States, with 140,000 members. So

  • Porsche club America started in 1955, was 12 individuals that

  • were just trying to figure out their way of how to maintain

  • these cars that weren't, there weren't many on the road, there

  • wasn't a large dealer network. Porsche also gets high marks for

  • reliability, customer satisfaction, and overall

  • quality. Consumer Reports named Porsche its top brand and 2020.

  • Porsche also scores highly on JD powers vehicle dependability

  • surveys, most recently, the study named the 911, the most

  • dependable vehicle

  • for the price that you have to pay for a lot of these high

  • performance specialized low production vehicles, you should

  • be able to at the very least expect average or better quality

  • and reliability. But you don't get that with a lot of brands,

  • Porsche you do, they have got a history of making cars that just

  • keep going and going.

  • These vehicles hold their value remarkably well. I've never

  • bought my Porsches for investment purposes. That's

  • never, that's never the point to own a Porsche. But it is nice to

  • know that many many Porsches after a decade of ownership, the

  • amount of value it retains, and in some cases, their GT cars. We

  • have owners that have bought their car, driven it for two

  • years, and dealers right now are calling out and say can we buy

  • the car back, and we'll give you the money that you paid for it?

  • So essentially, they've owned that car for free for two years.

  • That is unbelievable. The Porsche brand is thought to be

  • so strong, there are questions among investors over whether

  • it's placed in the Volkswagen Group portfolio allows the brand

  • to fully unlock its value.

  • Some people have even contended that Porsche could be worth all

  • of the W. And the reason is they're looking at Porsche, and

  • they're saying, this is kind of like a luxury company like our

  • Mazda or LVMH, or Rolex, and they ascribe that type of

  • valuation to Porsche and come up with a really high valuation.

  • The automotive market is crowded even at the higher end, while

  • Porsche was an early entrant into the luxury and high

  • performance SUV segments many others have followed. One reason

  • that this doesn't worry some analysts is that many of those

  • new entrants are priced just a bit higher than Porsches

  • offerings. In terms of both price and reputation. Porsche

  • seems to occupy a relatively under populated niche between

  • big and accessible luxury brands like Mercedes Benz and BMW and

  • the very high end brands like Ferrari, Lamborghini and Aston

  • Martin even the bass nine elevens, which are by no means

  • cheap seem to exemplify this they perform like supercars and

  • reliable daily drivers at the same time. A new kind of vehicle

  • that first found a true home at the high end of the market is

  • the Eevee and Porsche has taken notice the brand released its

  • electric tie icon in 2019. The TT icon is already selling about

  • as well as the 911 Porsches. production numbers are a decent

  • proxy for sales and Porsche produced about 29,450 tie cons

  • in 2020, compared with 28,672, nine elevens. Porsche wants to

  • bring electrification to other models, on its way is the

  • electric version of the Porsche makhan Porsches biggest seller

  • worldwide in 2019, and second biggest in 2020. As of June

  • 2021, Porsche plan for half of the vehicles it sells to be

  • electric or hybrid by 2025. But Porsche says it cannot and does

  • not want to fully electrify every vehicle. Some cars have

  • been designed around internal combustion engines and changing

  • that would compromise their character. This especially

  • includes the 911 Porsche has spent decades refining the 911

  • to perform around its rear mounted internal combustion

  • engine and placement of the engine and powertrain are part

  • of what gives the 911 its unique driving experience. Porsche says

  • the answer to this problem is something called e fuel. ie

  • fuels are made through a complex process carbon dioxide is pulled

  • from the atmosphere and mixed with hydrogen and water to make

  • something chemically resembling methanol. That methanol is then

  • converted into gasoline. So when the fuel burns, it does release

  • carbon into the atmosphere, but it is the same carbon that was

  • pulled from the atmosphere to make the fuel in the first

  • place. Thus, Porsche says the fuel is carbon neutral and it

  • doesn't contribute to global warming, if you will, requires

  • no engine modifications to work. Porsche has already tested the

  • fuel in racing conditions in 2020, and formed a partnership

  • with Siemens energy and several other energy companies. To build

  • the world's first industrial scale factory for making e fuels

  • in Chile, the project called for an initial investment of 20

  • million euros or about $24 million and uses technology

  • developed by Exxon Mobil

  • using wind power to create synthetic petrol. And

  • effectively they can maintain their IC engines and still be

  • carbon neutral. You know VW Group plans on being 50% of all

  • of its sales by 2030 to be fully electric. We think certainly

  • Porsche will likely exceed that amount. So it'll probably be by

  • 2030, a combination of full electric and to some extent, e

  • fuels, powering some of its sports cars like the 911

  • moves like these are in keeping with the carbon conscious

  • strategy pushed by Porsches parent Volkswagen Group. The