Audi Cayenne Turbo / Audi Touareg. Porsche’s Obituary
In this case, Porsche is the “accursed” one, seemingly forced to deal with VW along its rather controversial history and, what is more, ending up in the sad position of being bought out by its “own child”.
Not everyone knows that Porsche wasn’t always an automobile manufacturer. In fact, they initially existed as a design consulting house. However, Adolf Hitler was keen on using automotive events for the benefit of his “master race” propaganda, thus creating a very close collaboration between the Nazi leadership and Porsche.
This union gave birth to Volkswagen - the famous people’s car, Panzerjäger Tiger - the infamous tank destroyer, and other war machines Hitler imagined and Porsche turned into reality.
In fact, the words Enzo Ferrari spoke when he abandoned sports car races are not far from the truth: “Porsche doesn't make racing cars, it makes weapons”. Porsche created fantastic sports cars, but, depending on demands, a tank here or a rocket there weren’t out of the ordinary for them.
The first own car project is born in 1938: Porsche 64 or VW Aerocoupe. Ironically (or maybe not), Porsche 64 was built with quite a lot of parts from the... Volkswagen, the cheap and popular car created by Ferdinand Porsche at Hitler’s explicit request, who just wanted an inexpensive and reliable automobile. Porsche 64 was especially designed for a Berlin-Rome race and only three such cars ever existed.
The first true Porsche car was only launched after WWII, in 1948. Porsche 365 was a rather small, light and aerodynamic sports car and left a mark in the history of the new Brand, while also setting forth the principles Porsche stood by over the years.
After the 356, which sold like hot cakes in several body variants, the 1963 Porsche 911 felt just a step away. Porsche went on to become a world renowned brand everyone praised and yearned for.
It was pretty obvious that Porsche’s new business was going to be success, with the backing of Ferdinand Porsche’s genius for every automobile bearing the Porsche badge. Wendelin Wiedeking, Porsche chief executive between 1993 and 2009, summed it all up in a very eloquent sentence: „Successful people want to buy cars from successful companies”.
Over the years, Porsche worked with VW on various occasions, borrowing gearbox or engine designs, some parts and at times even production lines. One thing’s for sure: although VW and Audi parts were always to be found in varying quantities in Porsche automobiles, depending on necessity and occasion, Porsches always had a special feeling and unrelenting quality, as Ferdinand had enforced from the very beginning of the company’s existence.
But Porsche was never a company to stand on its own feet and alternated between hugely profitable periods and great losses, imputed to the management’s extraordinary ego, who seemed more inclined towards tradition than to making a profit. And yet, they managed to stay independent. Until recently...
The Cayenne’s launch and subsequent success have apparently created enough of a revenue boost as to revive Porsche’s dreams of world supremacy, probably under the influence of their old time collaboration with Hitler’s regime.
Although the Cayenne was (again) based on VW/Audi parts, it sold extremely well and left its luxury SUV segment rivals in the dust quite easily. The legendary Porsche quality came again into play and, while heavily criticized by the brand’s die hard fans, the Cayenne was an instant hit with clients who wanted the Porsche experience without jumping into a cramped and completely impractical 911.
Riding high, Porsche’s management thought this was the time they could afford to acquire the VW giant, which had itself engulfed 9 other brands over the years. In 2005, Porsche increased its stake in VW from 5% to 20% and by March 2007, they had over 30% of Volkswagen’s shares.
In January 2009, Porsche already owned 50,7% of VW, thanks to the helping hand of the banks, ever willing to „ease” one into massive debt, as long as some kind of warranty exists. And yet, the 50% plus stake in VW was not enough for Porsche to actually assume control, due to an old German law…
In May 2009, Porsche started to see how their efforts were failing, while debt was piling up at an alarming rate. The subject of a merger between the two companies came up.
In October 2009, VW owned 49.9% of Porsche, and it was agreed they would start paying some of the debt Porsche had made biting more than they could chew. And so it came to pass that Porsche became the tenth jewel in Volkswagen’s crown.
"Like Audi today, Porsche can also continue its independent development under the aegis of Volkswagen and preserve its own identity" - Martin Winterkorn, chairman of the Volkswagen management board. “Volkswagen and Porsche have excellent know-how at their disposal and can use their resources even more efficiently by combining them”
Now it’s official: the inevitable has happened. Porsche can’t act as an independent company anymore and will have to sing to the tune of VW’s decades long experience. An experience characterized by the buyout of many popular brands that didn’t manage to stay profitable and were subsequently transformed into manufacturers of expensive boxes filled with cheap VW parts.
The first Porsche ever was created by Ferdinand Porsche in a Stuttgart garage. Come to think of it, what’s left of the value, of the significance of having Stuttgart mentioned in Porsche’s badge, now that VW’s making the cars and they’re doing it anywhere they can fiind the cheapest workforce?
How much of a Porsche will a „made in China” Porsche be?
Furthermore, turmoil inside VAG is already ongoing, as Audi refuses to become a second-rate brand. If Porsche managed to somehow win the battle for keeping control over the manufacture of small-medium sized cars, they certainly lost on the SUV front, which will be exclusively handled by Audi, just like all upcoming SUVs from Volkswagen.
If up until now Porsche had freedom of choice regarding what parts they could use and how, the future will bring new cars with the Porsche badge slapped on them, but built with different principles, dull and driven by sales performance, market shares and, yet again, the all-feared profitability.
And that’s only the beginning. Porsche is now being assimilated into a system known to slowly erode values, something the Volkswagen group is pretty famous for. The Porsche values and the Porsche logo itself will be evened out gradually and turned „profitable”.
The first example? The Baby Cayenne is coming soon. A car made by Audi and sold with a Porsche badge. More to come.