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NASHVILLE, Tenn. -- Faced with a glut of sports cars last summer, Porsche Cars North America Inc. quietly did what its executives swore they would never do again - offer customer incentives.

To cut bloated inventories, Porsche put $2,000 to $3,500 cash rebates on its aging 911 and Boxster models. The deal, which was in effect from Aug. 1 to Oct. 31, was offered only to Porsche owners and was not advertised.

The incentives came a year after the company's top executives in Stuttgart abruptly ended a $500 cash-back program for Porsche Club of America members that had not been authorized by headquarters.

When Porsche AG CEO Wendelin Wiedeking killed the program in August 2002, he vowed: "It won't happen again."

Wiedeking said he would rather cut production than taint the Porsche brand with incentives. He also publicly scolded Fred Schwab, then Porsche Cars North America's CEO.

But Wiedeking changed his mind when sports car stocks piled up this summer. Inventories rose despite three production cuts last year and this year that slashed output by 7,000 units.

Inventories decline

U.S. sales of the 911 and Boxster fell 28 percent to 13,178 during the first 10 months of this year. But the summer incentive program helped slow the rate of decline.

Porsche Cars North America had a 76-day supply of sports cars on Aug. 1, but supplies had fallen to 54 days by Nov. 1. Boxster supplies have fallen from a 92-day level on July 1 to 76 days on Nov. 1. Supplies of the 911 Carrera 4 have come down from a 116-day level on Aug. 1 to 75 days on Nov. 1.

Peter Schwarzenbauer, who replaced Schwab in March, says the cash program was a pilot. A review began this month to determine whether rebates will be offered again, he says.

Schwarzenbauer spoke at an introduction of two Porsche cabriolets in Nashville, Tenn.

He is adamant that Porsche's incentives weren't like the rest of the industry's. "We are not offering incentives as I understand them. We are offering current owners a loyalty program rather than trunk money. Incentives, we think, are a wrong tool."

As for the apparent about-face since the summer of 2002, Schwarzenbauer said, "I wasn't around then."

Porsche AG spokesman Michael Schimpke in Stuttgart says the summer's rebates were intended to reduce stock and increase dealer inventories for a certified used-car program that began in July. He says the incentives had the full backing of Stuttgart.

Caught off guard

"This was done for a special time in America when a lot of things like the economy and the war came together," Schimpke says. "We didn't know how Cayenne sales would go or how things would shape up for Porsche."

Only vehicles in stock were eligible for the rebate, he says.

"It was no secret that the days supply was high on the sports cars," says Jerry Nelson, owner of Schneider-Nelson Porsche in West Long Branch, N.J., and until recently chairman of Porsche's national dealer council.

Nelson says bulging inventories were the main topic of discussion at a dealer council meeting in Germany at the time of the Frankfurt auto show in early September.

"It got high," Nelson says. "With Boxster and Boxster S it was about 100 days.

"We were caught off guard by the war. We are trying to get the franchise target for inventory to 45 days supply."

In particular, the incentives helped dealers with customers coming off leases, Nelson says, "because there really wasn't any advertising of the rebates.

"Porsche had three large production cuts, and that's truly the bigger solution," he says. "If you give rebates all the time you don't help the resale value of the vehicles."

Aging lineup

Porsche's sports car lineup is aging. The 911, which debuted seven years ago, will be replaced during the 2005 model year.

A successor for the 8-year-old Boxster is planned for a year later. But the new Cayenne SUV is offsetting lower sales of the older cars. Altogether, Porsche's U.S. sales are up 25.8 percent this year.

The Cayenne accounts for nearly half of Porsche's monthly volume. Sales of the SUV began in March, and 9,899 units were sold through October.

autonews
 

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njn63 said:
it's a sad day in the sports car world when Porsche makes an suv. Even sadder when they have to rebate their sports cars to sell them. Porsche is becoming just another car company it seems and losing a lot of it's prestige. I just hope Ferrari and Lamborgini learn from Porsche's mistake.
sad day when porche makes an suv? have you read up on the cayenne? it owns skylines
 

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Considering the glut of sports or sporty cars in the $35-45,000 range, Porsche IMO has made an error in not giving the Boxster a more drastic facelift sooner. :rolleyes:

As a former PCA member who went through the tough time of the late 80's and early 90's with the brand, I'm always pulling for their success.:D
 

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mrmyz said:
beauty is in the eye pf the beholder
Werd! There's a Porsche dealer here in Torrance so I see them around quite often. IMHO they look OK for an SUV. ;)
 

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How good the Cayenne doesn't matter to me. The fact is, the company went from strictly making sports cars (they've never so much as made a sedan) to making an SUV because they were popular. Especially the V6 Cayenne - Porsches should never do 0-60 in the 9's. Sellouts.
 

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White98LS said:
How good the Cayenne doesn't matter to me. The fact is, the company went from strictly making sports cars (they've never so much as made a sedan) to making an SUV because they were popular. Especially the V6 Cayenne - Porsches should never do 0-60 in the 9's. Sellouts.
Pride doesn't put food on the table. Can you blame them for analyzing market trends and trying to capitalize on them? If I was an investor or even a worker on their production line, I'd be delighted that the management is finding ways to keep a steady production flow going.;)
 

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White98LS said:
How good the Cayenne doesn't matter to me. The fact is, the company went from strictly making sports cars (they've never so much as made a sedan) to making an SUV because they were popular. Especially the V6 Cayenne - Porsches should never do 0-60 in the 9's. Sellouts.
dude porche has a racing legacy and they have kept true to what they are for a long time but when it comes down to it they are a company and they need to turn a profit and make money so that they can stay around. in my opionion porche didnt sell out with the cayanne. they made a nice pimp ass suv. they built it on the 911's frame and offer a version that beats most production sports cars off the line in a str8 away and hangs with beasts in the track. what more can you ask for out of an suv. you can say alot about suv's but the cayanne is not your average suv. call it a bastardation of the porn insignia all you want but look at the specs. porche is a company that makes cars that perform. the cayanne performs
 

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It also weighs 5800lbs, a good half-ton more than it's competitors.

And where did you get that it was built on the "911's frame"?? It's based off of a Volkswagen, my friend. The 911 is rear-engined anyway, how could it be based on the 911?! The Cayenne S couldn't beat the new Cadillac SUV in Car and Driver, most of the Europeans don't like it, and even Money magazine called it a big disappointment. Porsche to me means fairly lightweight sports car.... the Cayenne is not a sports car and weighs twice as much as a Boxster. Sure they have to turn a profit - the company was doing better right before the Cayenne than they had since the '80's....
 

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Discussion Starter #11
id have to agree. porsche went out of its way to shoot it self in the foot on this one.
wtf were they thinkin?
sure the cayanne sales are still ok, but it is not as what porsche was hoping it would be. the reason why the cayanne is even selling at all is becuase you can pick some up at $10-$20k discount on the turbo.
now that the new infinit FX is out, porsche 'niche' market is like gone. you can pick up the FX, top of the line with everything for $51k MSRP, the cayanne S sticker for $55k the turbo sticker for $89k.

theres also alot of people complaing and wanting to get rid of the cayanne. some people are dealing with $15-$20k depreciation when they sell it after one year on the cayanne.

they would have done better spending all that money into development of a new boxster that can beat an s2000 and more affordable.
 

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White98LS said:
How good the Cayenne doesn't matter to me. The fact is, the company went from strictly making sports cars (they've never so much as made a sedan) to making an SUV because they were popular. Especially the V6 Cayenne - Porsches should never do 0-60 in the 9's. Sellouts.
i think lambo did make a SUV that looked like hummer in the 1980s and look what happen to lambo in 80s, they look money... alot of money.. but now under the new management by VW Audi lambo became the exotic car maker again.
 

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divinewisdom said:
id have to agree. porsche went out of its way to shoot it self in the foot on this one.
wtf were they thinkin?
sure the cayanne sales are still ok, but it is not as what porsche was hoping it would be. the reason why the cayanne is even selling at all is becuase you can pick some up at $10-$20k discount on the turbo.
now that the new infinit FX is out, porsche 'niche' market is like gone. you can pick up the FX, top of the line with everything for $51k MSRP, the cayanne S sticker for $55k the turbo sticker for $89k.

theres also alot of people complaing and wanting to get rid of the cayanne. some people are dealing with $15-$20k depreciation when they sell it after one year on the cayanne.

they would have done better spending all that money into development of a new boxster that can beat an s2000 and more affordable.
by making an SUV they onli satistfy the american market but other part of the world felt that its unecesary. look at other exotic car company like ferrari and lambo, they doesnt have any SUV in their curent lineup.
 

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dodolaje said:
i think lambo did make a SUV that looked like hummer in the 1980s and look what happen to lambo in 80s, they look money... alot of money.. but now under the new management by VW Audi lambo became the exotic car maker again.
The difference is, Lambo didn't make an SUV just because it was trendy, they made it because the Army wanted one from them. Then the Army decided it didn't want it, so Lambo got screwed.
 

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Discussion Starter #17
dodolaje said:
by making an SUV they onli satistfy the american market but other part of the world felt that its unecesary. look at other exotic car company like ferrari and lambo, they doesnt have any SUV in their curent lineup.
yes, you are correct, that the trend in america is the big SUVs.
but the thing that kept prosche sales up is that it differentiated it self from the market. thats the type of buyers that porsche had as customers. by making a big suv and jumping on the bandwagon then they are just like the rest.

plus the price of the car is far too high for even a porsche. can anyone justify a $90k SUV? i dont care if it has a jet turbine engine and 0-60 in 1 sec, it doest satify enough people to make a buck, if it is $90k.
 

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njn63 said:
and Lambo's suv had a v12 diablo motor under the hood.
It was a Countach V12, not a Diablo. The Diablo didn't exist until '91 anyway.
 
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