Ken Gratton•17 Feb 2014
NEWS
Porsche plays it safe with Macan
Factory output for new SUV will be limited to a conservative 50,000-unit ceilingThere's one hitch in Porsche's plan to roll out Macan production across the globe – the prestige manufacturer may have underestimated demand.
Macan is being built at Porsche's plant at Leipzig in what was formerly East Germany. The facility is already building Panamera and Cayenne there, and the production capacity available for Macan is no more than about 50,000 units per annum. In even a small market like Australia, the Cayenne sold over 1100 units last year – and the more affordable Macan can be expected to do better than that once it arrives here.
With the world's media in attendance last week for the first drive of the new model, Matthias Müller, Porsche's Chairman of the Executive Board, was quite explicit in his view that the Macan would achieve quick acceptance from global consumers.
"We have no doubt the Macan is exactly the right car at the right time," he said through an interpreter. The segment in which Macan plays is expected to total 1.3 million vehicles this year, and, based on 3.4 per cent growth average per year over the next 10 years, that segment is anticipated to reach 1.8 million global sales by 2024.
Short of Macan failing to ignite in world markets – which seems unlikely, based on our drive of the new model – the Macan should be at least as popular as the Cayenne, both in Australia and abroad. That points to the Macan's production capacity falling short of demand by a significant degree.
Asked subsequently about the Macan's production constraint, Müller sounded almost nonchalant about the prospect of demand for the new SUV outrunning supply.
"We started with a... modest approach to this project," he replied during a Q&A session. "For us the facts of business economics play a role... We had always calculated the project with 50,000 units... if the markets should respond more positively to this vehicle, we'll be able to raise capacity, either by employing some reorganisation in our labour structure, or we do some more investment.
"The order income is really positive, and within the foreseeable future we would be able to produce more."
There are already signs that the Macan is going to be hard to lay hands on in Australia. Paul Ellis, the Director of Public Relations at Porsche Cars Australia, told motoring.com.au last week that the company has already taken 200 orders for the Macan – sight unseen. And perhaps as many as 40 per cent of those prospective buyers are new to the brand.
"We've been surprised by the number that are new to Porsche..." he said. "I'm going to say from anecdotal evidence it's probably around 40 per cent... which is quite significant."
So a larger-than-expected figure for first-time Porsche buyers suggests that the company (in Australia, and by extrapolation the rest of the world) will be caught napping with insufficient stock in the first six or 12 months – and possibly longer than that.
"We're not going to have issues with supply," Ellis argues, "because we've been given a very good allocation for the initial launch period, so we're quite satisfied that our production allotment is going to be good."
Ellis, citing Müller's remarks from earlier in the day, also had this to add, however: "Mister Müller confirmed that targets were modest for Macan – and it wouldn't be unexpected that they would have to revisit those targets."
What would that entail though; would Porsche reduce production of Panamera or Cayenne to ramp up production of the Macan? No, says Ellis.
"I don't think the company would want to do that."
Instead, he indicates, Porsche would establish another shift at the factory. There's a real risk that Porsche may find itself in the same situation as other prestige brands in Australia – demand that cannot be met /news/prestige-and-luxury/mercedes-benz/supply-side-strain-for-mercedes-benz-40906. Such demand would be at odds with the old prestige car distributor's axiom: build one more car than there are customers for the model. Buyers in Australia already face a long wait for cars built to special order. If they're at the back of a long queue as well, that could be damaging to the brand in the long run.
But Ellis remains confident the factory can cope, and adapt quickly. As for Macan sales in Australia, Ellis hints that the Macan may sell strongly in some regions, weaker in others. The distribution of cars in Australia will reflect that, with some dealers receiving more stock and others less.
"It's not going to be up to dealer allocation so much, it's going to be up to customer allocation. So... which customer put the order in – and if the customer belongs to dealer X then dealer X gets the car to deliver to the customer."
And every dealer will have a demonstrator to suit every test driver, it seems.
"Absolutely. They will have a diesel, they will have a petrol [Macan S], they will have a Turbo each."
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Written byKen Gratton
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