German Carmaker Narrowly Averts Bankruptcy

[Vytenis]

Found this article on Pelican forum.

http://www.spiegel.de/international/busi...66,00.html

"V"

 

[Brian Minkin]

The credit crunch at work.  Not a good outlook for Porsche.

[emayer]

Unfortunately the situation is even worse and the tables may very likely turn on Porsche.  VW walked away from the table late last week in respect to a merger.  There is a real chance VW may take over Porsche altogether.  Remember there is bad blood in respect to how Porsche (Wiedeking) handled the takeover attempt.  His head is on the line.  Too bad.  He really turned the company around and is going to get burned now for reaching too far.

There are some behind the scenes discussions ongoing with Mercedes which is in (relatively) sound financial shape.  They've collaborated before when Porsche was in trouble....

[emayer]

This posted today on Forbes.  Ominous.

http://www.forbes.com/2009/05/26/porsche...otive.html

[Darren]

At the risk of going off-topic, it's all dependent on what the US stock market and housing prices do.  Oh that and inflation

Porsche made mistakes -- they had financial problems a few years back when the 996/986 came out.  They brilliantly made 1/2 the cars exactly the same, from the dash to the bumper.  They used the market of the Boxster to make it cheaper to make the 911 and they profited!  In fact weren't they the most profitable car manufacturer in the world??? They only made 2 cars then.

Now look at what they are doing.  I like the Cayman, but that's another line to maintain.  They Cayenne is/was stupid for them.  I love the vehicle, makes no sense for their business.

IMHO all of these car companies make too many products which increases their costs to the point where they can gain market share in a boom but they get killed in a bust.  Why is there a Tahoe AND a Yukon? Makes no sense.  What is the value add of having both?

Do we need 5 different Porsches? 911, Cayman, Cayenne, Boxster, whatever they call the 4-door monstrosity?  I think not

[emayer]

I agree with Darren's sentiments but the numbers seem to tell a different story.  No doubt the fusion of Boxter and 911 components in the last decade was a major manufacturing and design savings measure.  From a profitability standpoint however it turns out the Cayennne has been the strongest player.  The reason stems from combined development with VW of major components and shared assembly.  As much as I hate the idea, this car really helped save the company.  The Panamerra follows the same principle and you will see some of the same underpinnings in VW and Audi offerings soon.

That said, even in the best economy a fusion of Porsche with a larger company is inevitable.  This stems from the increasing fleet demands on fuel consumption and CO2 output worldwide with the associated development and production costs.  Porsche needs VW or a similar company to achieve compliance.  I think the philosophy amongst the powers that be at Porsche was that they would rather lead such a merger than be absorbed.

Porsche is on life support at the moment, I'm not optimistic that the financial and housing markets will turn around quickly enough for sales to increase sufficiently.  Ironically, it may be the Panamerra that changes the equation one way or the other.