After 10 years of marriage, Lee M. Katz’s wife asked why they had no living-room or dining-room furniture, but two Porsches.
“Priorities,” he said.
It is fanatical owners such as Katz, managing partner of the local consulting firm of Grisanti, Galef & Goldress, that Porsche is counting on as the auto company faces a tough economy, a need to diversify and a consumer aversion to luxury.
“We certainly have not been immune to the economy,” said Detlev von Platen, president and CEO of Porsche Cars North America (PCNA), which moved its headquarters in 1998 from Reno, Nev., to Atlanta for the convenience of the airport.
“But we are still a niche car company that doesn’t need to sell millions of cars like our competitors.”
Von Platen works out of PCNA headquarters on Hammond Drive near Perimeter Mall. He oversees a staff of almost 200 that provides vehicles, parts, service, marketing and training for its 200 dealers.
Porsche, he said, has maintained its market share, and its two new models, the SUV Cayenne and the Panamera, a four-door sedan, have been well received.
That is good news to Porsche enthusiast J.D. Humphries, a member of the Stites & Harbison law firm, who drives a Cayman S.
“It’s about being in control,” Humphries said. “You get such a feel for the road, especially if you have a manual transmission, which is really the only way to drive a Porsche. Porsche drivers don’t want a car that drives itself. We don’t want computers and all these new gadgets that so many cars have today.”
With global sales of 81,850 cars, the Stuttgart, Germany-based manufacturer saw an 8.8 percent increase for fiscal year 2009-10, which ended Aug. 1.
PCNA closed the fiscal year up 16.6 percent, with total sales of 22,180.
On the other hand, sales of the standard-bearer Porsche 911 were down both globally and in North America. In fiscal year 2009-10, sales dropped 27.4 percent globally, to 19,663 units, and declined 21 percent in North America.
To broaden appeal, Porsche continues to roll out new models.
This fall the company unveiled the Cayenne S hybrid, the first of several planned hybrids embodying the company’s new philosophy (“Porsche Intelligent Performance”), which says that high-performance cars can be fuel-efficient and environmentally friendly.
Porsche is also launching the GT3 R hybrid, a race car, and in a few years, the 918 Spyder, a “super sports car,” as a plug-in hybrid.
The question is whether these new nonsports cars are expanding or hurting the Porsche brand.
Alan Baum, president of Baum & Associates, a West Bloomfield, Mich., research company that specializes in the auto industry, said Porsche is “in danger of diluting the brand.”
Baum fears that Volkswagen, which owns Porsche, may go after profits and volume at the expense of the brand.
“Look what happened when Ford bought Jaguar,” Baum said. “Jaguar was a high-end car with reliability problems. Ford essentially put a Ford engine in the X Type and dressed a Ford up like a Jag. Everyone knew it, and it brought the brand down. The potential is there.”
Rebecca Lindland, director of automotive research for IHG Global Insight, an Englewood, Colo.-based research firm, said the Panamera is “doing fine.”
“I wouldn’t say it’s exceeding expectations,” Lindland said, “but it’s meeting expectations — and Porsche had pretty realistic expectations.”
The Cayenne SUV, which ranges in cost from $46,700 to $104,800, is “just one more entry in a tough SUV market, although it may pick up speed when it offers a hybrid version,” she said.
Lindland also worries about Porsche’s brand.
“They’re only 0.2 percent of the market, so they’re pretty small. Porsche was never about volume,” Lindland said. “You have to be careful not to lose the mystique. When some element of mystery is lost, then you’re in trouble.”
Von Platen, PCNA’s president, says Porsche’s brand benefits from the extensions, and it will lure new buyers without offering a cheaper entry-level model like Mercedes and BMW.
“If you look at the 911 of 40 years ago, it hasn’t changed all that much. We don’t need marketing studies on the 911. It has timeless design,” von Platen said.
“We have protected and preserved the brand. The new models do not contradict what Porsche is known for. The characteristics of a sports car are in the Cayenne and Panamera,” he said. “With us, design follows form and form follows function. We don’t have to go after new trends.”
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