MOTORING / No longer so upwardly mobile: Porsche's image has become tarnished and sales have plummetted. Will the new 911 revive them? Matthew Gwyther reports

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The Independent Culture
LAST year Porsche held a little soiree at the Design Museum in London to show off a prototype of its Boxster car, due to be launched in 1996-7. Standing on the balcony with Kevin Gaskell, the 35-year-old managing director of Porsche GB, was Sir Terence Conran, who has owned Porsche 911s in his time. 'You see that development over there,' said Sir Tel, pointing across the river. 'The people who built that gave your cars a bad name.'

Conran was referring to a notorious incident back in 1988 when an estate agent offered a free Porsche 924 worth pounds 23,000 to anyone who bought a pounds 370,000 riverside house in Limehouse. 'We were tarnished as a yuppies' give-away,' says Gaskell, now a wiser man. 'But that is history.'

Porsche's here and now is the recent arrival of the latest version of the charismatic 911. Although it dates back to the early 1960s, it is still far and away the best selling model the company offers. Like the Mini or the Beetle, it has become a classic that will not be laid to rest. With a completely new rear suspension that is less likely to send 911 drivers at high velocity through hedges backwards, this latest incarnation is already proving a nice, interim settler for Porsche after the queasy roller-coaster ride of the 1980s.

The Eighties were an extraordinary decade for Porsche. The world went Porsche-crazy and the factory could hardly keep up. Its 197mph wondercar, the limited edition 959, started changing hands for dollars 1m ( pounds 650,000) apiece in Japan. At the other end of the scale, a pounds 250-a-week lawnmower mechanic from Hemel Hempstead named his daughter Porsche Carrera. With a brand image so potent and universally recognised, it was easy to forget how tiny an outfit Porsche was. Its total share of the UK car market is a mere 0.06 per cent. The Volkswagen group produces 240 times more cars than Porsche. But, in the world car ring, it boxed at way above its weight.

The Stuttgart flyweight jabbed and parried, and is now nursing the bruises. The sales figures are enough to tell the story of the calamity: 1985-86 worldwide vehicle sales, 53,000; 1990-91 vehicle sales, 26,000; 1992-93 vehicle sales, 12,500. Porsche had always been very careful with money - in Germany, Swabians have a reputation as canny folk - never borrowing and seeing out previous recessions in good shape. Before the Nineties they had never made a loss in the company's 40-year history. But in 1992-93 they lost pounds 95m and expect to lose a further pounds 60m by the end of this year.

When he was appointed managing director of Porsche GB in 1991, Kevin Gaskell found that what had been one of the peachiest car jobs around had turned into a tricky one. He had some unpleasant axe-work to perform. The headquarters in Reading, a pounds 13m smoked-glass pile, now employs only 90 people compared to more than 200 in 1988. He also had a stockpile of 2,250 cars with a sales level in the UK down to around 1,000 cars per year. Resale values, which had always been outstanding, started to slide and existing Porsche owners grew angry as news of discounting saw their asset diminishing in worth faster than they had thought possible.

To his credit, Gaskell has steadied the ship and brought back some confidence. He commissioned some market research - the first for years - to see what the public thought of his products. The report did not paint a pretty picture. Porsche and its 28 dealers were stereotyped as aloof and arrogant purveyors of highly expensive machines, who were losing out to keener-priced Japanese competition.

Porsche has been conducting a rearguard public relations action to show that its cars were not simply the playthings of loathsome stripe-shirted, youthful City slickers. 'Even at the peak, fewer than 4 per cent of our sales ever went to City people,' says Gaskell. The truth about the average Porsche driver is that he (only one in 10 is female) is a 40- to 45-year-old salt-of-the-earth, self-employed professional on pounds 60,000 a year with a couple of children. And he is loyal to the marque. Eighty per cent of 928 owners come back for another big, bruising grand tourer at pounds 69,875 apiece.

There is a new humility abroad. Gaskell now wants to service and restore cars at HQ at competitive rates. There are no more ropes around untouchable Porsches at the Motor Show. Children are invited to clamber all over them. There is even talk of Porsche in this country importing a Far Eastern manufacturer's products to use up some spare capacity.

The one question that is consistently now asked is whether Porsche can survive alone and independent. Professor Garel Rhys of the Cardiff Business School is unsure. 'The balance of probability is less than 50-50,' he says. 'Any car manufacturer that is smaller than the biggest finds it hard to survive. And if you look at Porsche's sector the precedents are not good. Both Ferrari and Aston Martin were forced to get on board a bigger ship.' In North America there is less of the European fastidiousness that holds sports car drivers back from purchasing Toyota Supras or Nissan 300 ZXs. If they are fast, well-equipped and cheaper, they sell.

That Porsche has retained its independence for so long is down to its unusual ownership - it is still family-controlled. The founder Ferdinand Porsche, born in 1875 and designer of the VW Beetle, has two surviving children, Louise Piech, now 89, and Ferry Porsche, 84. (Louise's son, Ferdinand, is now in charge at Volkswagen.) They may have bickered over the years - Ferry has likened the family squabbles to 'sand in a well-oiled machine' - but they have stubbornly held out against predators and will have to stump up cash for a coming rights issue.

There are other potential hitches involved with takeovers. Thirty per cent of the company's turnover is provided not by building Porsches, but by undertaking research and development work for other car manufacturers. The alarming 163mpg Audi Avant RS2 'super estate', for example, is a Porsche product. They have built 32 engines from scratch for clients in the last 10 years at Weissach. Whether the Chinese walls system could work if BMW or Mercedes owned Porsche is doubtful.

For the time being, spirits and sales have been raised by the new 911's recent arrival. It is a tremendously exciting car to drive. Despite the tamed rear suspension, it can be a handful - especially when driven quickly in the wet - and demands complete concentration. However, rather than banging on about a swiftness that might see those elderly drivers' toupees wind up on the back seat (0-60mph in 5.6 seconds), Porsche is keener to tell you that the car will now do 25mpg and even collect the dust from its own clutch. (Porsches have an even stronger green credential - of the 950,000 cars built, more than 700,000 are still on the road.)

David Jones, the sales manager at AFN Chiswick, the UK's largest Porsche dealer, is delighted. 'It is selling very well indeed. Ninety per cent of the 911s we have sold so far have gone to existing customers,' he says. 'And they must have confidence because we need a pounds 5,000 deposit when we take an order.' If you place an order with Jones now, your car will not be delivered until June or July.

Porsche, however, is well aware that it cannot survive on the continuing popularity of the 911 alone. The crunch will come with the introduction of the new two-seater Boxster car in 1996- 97. With an estimated price of about pounds 30,000, Porsche knows that it needs to emulate the Japanese and make cars more quickly and more cheaply. The 911 currently takes 85 hours to build and it is hoped to get that figure down to 60. The Honda NSX sports car takes less than 50 hours to piece together. Sir Terence apparently liked what he saw of the Boxster at the Design Museum. When production gets under way in two years' time, he has said he may well be interested.

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