Porsche’s effort to broaden its customer base could backfire: Exclusivity is a key brand attribute
In normal times, being Porsche’s boss would rank as one of the world’ s most desirable jobs. But I do not envy new Chief Executive Officer Michael Leiters one bit.Barely two months after taking the helm, he made a decent fist on Wednesday of outlining what ails the German sportscar manufacturer and providing the first hints of how he plans to put things right. He’s committed to restoring the company’s “former glory” and insists Porsche “represents a compelling recovery story.” But investors hoping his arrival marks an immediate start of better times for the storied brand could be disappointed.
Not only will reviving Porsche take a long time, it could also cost more than shareholders were hoping. As a former CEO of McLaren, and chief technology officer at Ferrari, Leiters was a fine choice to succeed Oliver Blume, who will now focus exclusively on running Volkswagen rather than trying unsuccessfully to manage both companies. But Leiters has a lot on his plate.
Porsche unarguably is an iconic brand with a first-class heritage, but its recent strategy seems like a tale of misjudgement and hubris. Its approach of “modern luxury with scale benefits” turned out to be far inferior to Ferrari’s more exclusive model of selling comparatively few cars at higher prices.The claim on the corporate website to be operating in a “structural growth environment” feels like wishful thinking. Porsche’s vehicle sales fell 10% last year, though that’s due partly to gaps in its model lineup.
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