Porsche’s US business had an eventful year in 2015.
The company opened a new, $100 million headquarters in Atlanta and sold a record 51,756 cars.
It also went through a major leadership change when — in November — Klaus Zellmer took over as president and CEO of Porsche Cars North America.
Zellmer — whose résumé include stints overseeing Porsche German as well as its developing markets — sat down for a chat with Business Insider at the 2016 New York auto show.
The Porsche executive touched on several topics including his company’s booming SUV sales and the future of the brand.
At the show, Porsche unveiled its new 718 Boxster sports car as well as a special edition variant of the company’s most enduring model dubbed the 911R.
The legendary German brand also rolled out the newest version of its best-selling Macan crossover. At $47,500, the 2.0 litre, 252 horsepower, four-cylinder variant of the Macan is the most affordable car the luxury performance brand sells in the US.
Here’s are a few of the major takeaways from our sit down.
On the new Porsche Macan SUV:
Although the new Macan is likely to be a big hit among consumers, there are some in the industry that believe the less powerful and less pricey car may dilute Porsche’s sporting reputation.
However, the Zellmer believes the more affordable version of the SUV lives up to the company’s exacting standards.
“As with all things in life there are a lot of drivers behind our decision to build the car,” Zellmer said. “All of these drivers have to result with a car that lives up to our customer’s expectations in terms of top speed, acceleration, handling and exclusivity.”
“Do we reach new customers with the new lower end derivative of the car? Yes. Of course. This car is there to enhance our success as a company. But we’re not bending the DNA of Porsche. We’ll never ever do that.”
On balancing brand mystique and with the reality of selling cars:
“I think it’s important to have a sustainable business case for Porsche overall. Of course you need a certain bandwidth of products on offer that sell in good times and in bad times. Again, we want to be the most aspirational brand. When we introduce a model on the lower end of the price and performance spectrum, we always have to make sure to strike a balance on the other end,” Zellmer said.
When Porsche introduced the Macan in 2013, almost simultaneously, the company also introduced its million-dollar 918 hybrid hypercar.
“It’s not a coincidence that we are here in New York with a four-cylinder Macan and next to it is a 911R,” Zellmer said in reference to the ultra-exclusive $200,000 version of the 911 sports car that’s parked next to the relatively bank account friendly Macan SUV.
On the whether there is such a thing as a too affordable:
In recent years, Porsche’s German rivals at BMW and Mercedes-Benz along with corporate sibling Audi have introduced lower priced models aimed at reaching younger, but less affluent buyers. With a price point starting at roughly $30,000, the BMW 2-Series, Mercedes CLA and Audi A3 have certainly helped the companies in terms of sales, but some have questioned whether the tactic will dilute the value and exclusivity of the respective brands.
“I think there is a certain price barrier you cannot undercut if you want your brand to stay exclusive and that barrier is different for every make whether that’s BMW, Mercedes, or Porsche,” Zellmer said. “I’m of the opinion that going to $30,000 is not feasible (for Porsche) as we speak.”
Although Zellmer added the caveat that it is possible more stringent fuel economy standards and emissions standards may one day force the brand to offer smaller and more affordable engines options in its cars.
“Currently, the price floor for Porsche’s line up is between $45,ooo to $50,000 depending on the exchange rate and region of the world,” Zellmer added.
“It’s quite a high barrier.”
On whether selling so many SUVs is good for Porsche’s image:
For a company whose mystique is built on its racing track record and iconic sports cars, Porsche sell SUVs in droves. In fact, nearly 70% of all Porsches that rolled out of its showrooms worldwide last year were SUVs. Thus, there may be a disconnect between the company’s image and the realities of its product mix.
“You always have to be aware of what perception you create and yes, the majority of our cars are not the typical sports cars people expect,” Zellmer said. “But if you drive SUVs from our competitors, and then drive the Macan and Cayenne, you’ll see that the Porsche is the sports car in the segment.”
“And this is what we aim for. Yes, we are capitalising on the potential of the SUV market, but we are delivering it with a sports car experience. That is how we are trying to protect that sports car image we have been building for the last 68 years.”
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