“The 911 will never be electric.” Michael Leiters, Porsche CEO
Michael Leiters is a good man. As the CEO of Porsche you may think that’s automatically the case, but Leiters’ predecessor Oliver Blume did his best to disprove that thesis. For those who have forgotten, Blume was part of the “let’s sacrifice our brands on the EV altar” group of CEO’s and was ousted late last year.
By then, sales and profits had taken a vertical dive while costs had moved just as vertically in the opposite direction, and Porsche’s whole survival came into question, as I discussed in my post almost exactly a year ago. Blume was then asked to focus on his CEO job at Volkswagen, having previously been the CEO of both companies. Very far from ideal!
In came Michael Leiters with a CV that makes any petrolhead jealous. Before Porsche, he notably ran McLaren and was before that the CTO at Ferrari. Safe to assume therefore that he knows a thing or two about sports- and supercars, something that has become obvious in the last weeks when he presented Porsche’s strategy for a return to profitability.
Thankfully, it’s one that is very far from Blume’s “80% EV’s by 2030”. I would even go as far as to say that it should ensure Porsche’s survival in the ongoing “Hunger Games” of European car manufacturers.
The new strategy is referred to as “Sportwagenschmiede 2035” which doesn’t translate well but basically means “sports car workshop”. It’s built around the concept car Mission S, on which details are still scarce, other than the confirmation that it will be mid-engined and positioned well above the top versions of the 911.
The Mission S also illustrates Porsche’s new design language, which in my eyes is a nice and an unmistakable evolution of the current looks. Design-head Tobias Sühlmann apparently prefers soft curves to hard lines, and based on that he’s achieved a modern design with clear retro hints. That includes the wheels, clearly inspired by the soft curves on the Porsche 928 back in the day.
When he presented the car, Leiters explained that they can run both ICE’s and hybrid engines on the platform, however no pure EV solutions. According to him, there is simply no demand for EV’s in the supercar segment. His exact words were “For Mission S, we will listen to the customer”.
Well halleluja! I’m almost thinking he reads this blog, since those were my exact words a couple of years ago, when writing about all the car manufacturers building cars that no one, except a bunch of unelected politicians in Brussels asked for, even less wanted.
Porsche also commits fully to the future of the 911. Plans are to continue production in a variety of versions, but none of them fully electric. We’ll probably see manual transmissions, and overall, Porsche vows to do everything they can to keep natural aspiration alive over the coming years. It would really be pushing it to ask for more!
Of course, no brand can survive on a supercar alone (and even less so on an electric supercar – hello Jaguar?), and that’s why the evolution of the GT segment will be crucial for a return to profitability. Here the workshop strategy includes a far greater focus on the offering and above all, the tailor-making of one-off cars for wealthy clients. Basically, we’re talking fewer but more individualized, and hereby more expensive cars.
Is Porsche thus becoming the new Morgan in terms of building new body styles for the Eric Sturdza’s of this world (check the last post on the blog if you don’t get it)? Hardly.
However, personalization and one-off cars represents almost 1/5 of Ferrari’s profits, and although Porsche may not reach the same astronomical levels, the hope is to add 20-30% with a high margin to the price of high-end cars, which by themselves fetch the highest margins.
A strategy moving upmarket with fewer cars and higher margins is not without risk, especially in the current environment. Also, Porsche is not Ferrari, and its ownership structure with Volkswagen’s at 75% doesn’t make it easier. That said, it has a base of enthusiasts which is far larger than Ferrari’s purer, high-end approach. After all, there’s far more 911s than Ferraris out there.
The key will be building on that base to attract more wealthy clients. For that, a clear and credible brand strategy is essential, and that’s exactly what Leiters is now providing.
Under Oliver Blume, Porsche showed they can build the best EV in the world for those interested in more than transport from A to B, albeit at an astronomical cost. Then, they somehow imagined that it and other EV’s would be the future center pieces of the brand. That almost drove the company into bankruptcy. The roll-back won’t be easy, but the new plan builds on all the right steps. And Michael Leiters seems to be the guy to make it reality!
