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Mini-Case 11– Is Porsche Killing the Golden Goose? Case Summary
When Porsche reveled its 911 Sportscar design in 1962, it caused a worldwide sensation.
Ever since, Porsche has been one of the world’s first performance car manufacturers. The
Porsche 911 is a legendary sports car icon. Although focusing on a niche market with a small
output every year, Porsche was extremely profitable. Even today, it still enjoys the largest profit
margins among all major auto manufacturers, thanks to the hefty premium it can command for its
cars.
In the years leading up to the global financial crisis of 2008-2009, Porsche attempted a
hostile takeover of VW who was eight times larger in market cap. This was motivated by a feud
between each company’s founding families. This was short-lived as Porsche collapsed under
heavy debt caused by the takeover.
More than 50 years after its birth, the 911 remains the heart and soul of Porsche.
However, a newer best-selling model named the Cayenne captured the popularity of American
and Chinese markets. Since wealthy Chinese do not drive themselves, roughly two thirds of
vehicles sold annually in that country are Cayenne models. Porsche then introduced the
Panamera and the Macan and saw added growth in popularity.
The essence of a Porsche-a high preformance sports car- now seems to take a back seat.
Many modern buyers are not aware of Porsche’s identy of a high performnace sports and race car
manufacturer. Now a division of VW since 2012, Porsche is increasing unit sales attempting to
take advantage of economies of scale and become the global leader. Between 2002 and 2014,
unit sales grew by over 550 percent.