Can the Cayenne spice up Porsche?

Porsche, the ultimate status symbol for the affluent, is breaking away from its roots, and building a sports utility vehicle (SUV).

The Cayenne will be launched next year, and is Porsche’s first foray outside its traditional arena of sports cars. The move has been considered by many as risky because the marque has built its image on high performance and a racing heritage.

In a deeply competitive market, all car makers are anxious to offer different models to suit different lifestyles. The SUV is becoming a must-have for families in the middle to high income bracket. This is especially true in the US, which is Porsche’s largest market.

Other luxury car makers have already entered the market. Mercedes makes the M-class SUV and BMW has recently launched the X5.

As both these German brands have engineering, safety and design as core elements of their brands, it is a logical step for BMW and Mercedes to build SUVs.

For Porsche, which has spent the best part of a decade working on this launch, the move is less an experiment, more a question of filling gaps in its portfolio of luxury vehicles. At present, the company sells only two models.

“The Boxster is a two-seater roadster essentially aimed at well-off people before they have children,” says Porsche brand communications and strategy manager Wayne Darley. “The 911 appeals to people who have made it, and they tend to be between 45 and 55. In between, when people’s lifestyles settle down, they can’t justify having a Porsche and we find them leaving us.”

Porsche admits that it cannot risk people deserting the brand, and that it has created the Cayenne to hang on to customers throughout all the stages of their life.

Darley says the car does not follow the SUV format favoured by other companies: “This is going to be quite different to other SUVs,” he says. “We are not actually positioning it as an off-roader, although the car will have off-road capabilities.”

The company will almost certainly have had to battle to be faithful to its sports car heritage while creating something that is chunky enough to cope in off-road conditions. The two Porsche models currently available are built very low to the ground, but the Cayenne will have to sit considerably higher in order to combat rough terrain, substantially altering the car’s handling characteristics.

There are no official pictures of the car, which is due to be unveiled to the public at the Detroit Motor Show in January 2002, but motor experts have been able to produce illustrations of what the car looks like based on pictures of highly-disguised test cars and some original drawings. Not surprisingly, perhaps, as Porsche is sharing a structural platform with Volkswagen’s future SUV, the Colorado, the impressions look a little like an overgrown Beetle.

“This car is definitely stretching the brand too far,” says Duncan Bird, a partner at ad agency Soul. “If you put your thumb over the badge of this car it will look like a typical Japanese off-roader. Porsche is supposed to lead, and I am disappointed that the company is copying everyone else.”

Car enthusiast Leslie Butterfield, chairman of ad agency Partners BDDH, agrees with Bird. “Porsche is in danger of diluting a very strong brand,” he says. “It does change the image of who the Porsche driver is, and if I am really honest it’s making me cringe slightly.”

Porsche has been through some turbulent times, and will have thought long and hard before it took the decision to create the Cayenne. The company has not built many models in the past 40 years.

The 911, the most enduring of the Porsches, was introduced in 1963. The entry-level 914 was introduced in 1970, and was eventually replaced by the 924 in 1975. There were various attempts at a mid-range model: the 944 and briefly the 968. And less successfully, a top-end model, the 928.

Sales began to plummet in the late Eighties, mainly because of a weakening US dollar and the looming recession. After a number of 924 variations, the 924F was launched in 1985, but Butterfield, who has dubbed it a “hairdresser’s” car, says it was a disaster for the company: “The car was created in order to increase sales, but it ended up actually diminishing the marque’s prestige.”

At the same time, the company was hurt by soaring production costs and an ageing product line-up.

Sales began to recover after Porsche’s chief executive, Wendelin Wiedeking, adopted lean Japanese production techniques, allowing Porsche to reduce the price of the 911 and introduce the Boxster roadster in 1996 at the relatively inexpensive price of &£22,000.

The Boxster boosted Porsche sales, which reached 4,059 in the UK last year, and the company expects sales to increase further by 2003, fired by the launch of the Cayenne.

Darley says: “This is more about the US market than the UK. SUVs are important in the States. Although we know they are going to sell well – we already have some pre-orders from customers – the numbers sold will be in the hundreds rather than thousands, to keep our brand prestigious.”

One person who backs Porsche’s move into the SUV market is analyst Professor Garel Rhys, head of automotive economics at Cardiff Business School. He says: “This is a very different sort of vehicle. It’s going to be very high-speed. Porsche’s objective is very different from the US and Japanese manufacturers.”

Rhys believes that the new model will not eat into Porsche’s existing market, and that the SUV sector is a market in its own right which has plenty of room for growth.

“People who have an SUV generally have another car, so I wouldn’t rule out Jaguar trying to get into this area in the future.” he adds.

According to Porsche’s own research, as many as 80 per cent of its customers also own an SUV.

If the Cayenne is a success, Porsche may consider moving into other sectors such as saloons, but the company will not be drawn on the issue.

Porsche has kept the launch of the Cayenne a heavily guarded secret, yet it is confident that there will be no problem selling the car. This may be the case, but the company’s main task will be to make sure its brand values remain intact.