car enthusiasts to name the brands that best exemplify

excellence in engineering, racing and design. And Porsche

will be one of the names that comes up. It has a racing

heritage that can't be argued with. It has made at least one

of the most iconic sports cars of all time, the 911 and it has

a large following of deeply devoted fans born like many

German automakers, out of a deeply dark history, Porsche has

become a name respected the world over

Porsche vehicles are one of those examples where the

precision, the craftsmanship that goes into these vehicles,

and then how it's reflected in their performance, and what

they're capable of doing both at at race levels, as well as on

the street perfectly embodies that kind of stereotypical

German engineering,

but it is also a changing company. The once independent

firm devoted entirely to sports cars has become a brand within

the massive Volkswagen Group, a company with which Porsche has a

long history, and it is viewed as a kind of jewel in that

portfolio. Volkswagen has other luxury brands that range from

the high end to the exotic, but Porsche is responsible for about

25% of VW passenger car profits. And while its fans may 1 think

of sports cars what really sell today are its sport utility

vehicles. This comes at Porsche is at another potentially

pivotal juncture, electric vehicles are coming and this

time they usually innovative and groundbreaking Porsche is

playing catch up. The automaker declined a request to be

interviewed for this story. Porsche has heritage loyalty and

a long track record of innovation competitive success

on its side, but it has built its heritage and its cars around

gasoline burning engines, how can it continue to succeed and

set sportscar standards in the electric age? The story of

Porsche begins with Ferdinand Porsche. He was an engineer Born

in 1875. in Bohemia, a region of what was then Austria Hungary,

and today is part of the Czech Republic, Ferdinand Porsche

secured his place in history when he became the designer of a

people's car or Volkswagen for Adolf Hitler. The car he

designed was called the type one but as widely known as the

beetle. The actual Porsche brand didn't form until 1948,

Ferdinand Porsche founded the company with his son also named

Ferdinand but nicknamed fairy, the first production car they

designed was called the 356. It had an engine borrowed from a

beetle and tuned for better performance, the vehicle had one

of the features that Porsche became famous for an engine

placed in the rear of the car. In the 1950s, Porsche began

making its own engines and improved the 356. It also made

the 550 Spyder a road racing car nicknamed the giant killer for

outperforming larger rivals, and the speedster, a stripped down

version of the 356. In 1958, the company built its 10,000 356

then, in 1964, the 911 the impression the 911, made on the

automotive world is tough to overstate. It is one of the most

iconic sports cars of all time. In keeping with Porsches

tradition, the 911 had an air cooled rear engine design, it

didn't have the biggest engine but was small, light and nimble.

Its starting price was $5,500. Today, a mere $46,363 a fraction

of the roughly $100,000 starting price of today's nine elevens.

Though Porsches were long known for their rear engine cars, the

company made front engine vehicles starting in the 1970s.

Porsche continued to make front engine cars until the 1990s when

it finally stopped producing them in order to focus on the

911 and the Boxster. In 1986 Porsches global sales topped out

at about 50,000 units, sales in the US and Canada, which

together were then Porsches largest market had reached

30,471, but they drastically fell to about 14,000 globally in

1993, and just 3713 in the US and Canada. By the early 1990s.

Porsche was in trouble. The company turns to a group of ex

Toyota workers who had formed a consultancy to carry Toyota's

legendary manufacturing principles and techniques to

other companies. Toyota's production system famously

relies on reducing waste. needed parts are kept near workers and

things are only sourced or made as they are needed. The Toyota

engineers helped the German company slimmed down its factory

operations. The result was a car that was all Porsche but

significantly more affordable because of a factory capable of

higher volume production. And sales at Porsche began to climb

again US and Canadian combined sales were 5820 in 1994 6078 and

1995 and 7524 in 1996. By 2000, Porsche was selling 22,412 cars

in the US alone, and a couple of years later, Porsche would

reveal a vehicle that would rock the automotive world. The

Porsche Cayenne. The Porsche Cayenne was a sport utility

vehicle and Porsche was a sports car company. Brand had only made

small roadgoing racecars As might be expected, purists

baulked, the common arguments were that Porsche was diluting

its identity and perhaps even selling out in the American auto

market. SUVs had gone from being purpose built vehicles for off

roading and the great outdoors to book your successors of the

family station wagon and minivan.

Initially, the move to two SUVs was was hotly debated. You know,

Porsche has a legacy of motor sports. It's very much in its

heritage. And certainly in the early 2000s when you think SUV

don't necessarily think Motorsports and the fear was

that, you know, since they share a lot of components with VW and

Audi, specifically, that a Porsche SUV would just be an

Audi with a Porsche logo on it. But that's not what happened.

Porsche very smartly decided to build SUVs that were more

Porsche and less, perhaps outtie. Over time, the

skepticism waned, though the Cayenne was an SUV, it was a

pretty high performing one.

I think it took the traditional Porsche enthusiast by shock.

What are you saying now we're going to build a four door SUV,

they designed it, they put it through rigorous tests, and I

drive a client as well. And I will tell you, it is the

sportiest SUV. If you take a two door versus a Cayenne of the

same year, yes, it's not going to be a 911. But I can tell you

it's going to be the quote unquote 911 of its segment.

In 2006, a Porsche Cayenne placed first in the trans

Siberia rally. It's a long grueling race that starts in

Moscow, Russia and ends in Ulaanbaatar, Mongolia, the

following year, Porsche Cayenne S vehicles placed first, second

and third in the race. In 2008. Cayenne SS took the top six

positions in the race. These vehicles were modified very

little from their stock condition, Porsche was able to

prove that Cayenne was not just a luxury SUV with a Porsche

badge, you could actually perform in challenging

conditions, the Cayenne and its smaller sibling the McCaughan

sold well, and SUVs now make up 60% of Porsche sales. In 2020,

the brand sold 57,294 units in the US alone, almost double the

high of around 30,000. Porsche saw in the 1980s when it was

still a pure sports car company,

early 1990s. They sold about 15,000 cars, you know, their

legacies, the 911 sports cars that's been built off of the

beaten to begin with, but then in the early 2000s, Porsche

found an interesting strategy of diversifying its customer

demographic, namely acquiring more female customers and

penetrating China, probably the most important auto market in

the world with SUVs, and today SUVs are about 70% of all

vehicles Porsche sells, so it's gone from about 15,000 units in

the early 1990s. Today, about 300,000 units, and SUVs are 70%

of those Automotive Industry

analysts say SUVs have not diluted the brand's identity 911

sports cars seem to have only grown more expensive in recent

years, they now start above $100,000,

the nine elevens and the other cars that Porsche sold have

actually maintained their price pretty well. And the reason why

is the SU v customer is a very different person that's buying

the 911.

This ability to weather challenges and overcome skeptics

owes something to the legions of Porsche fans around the world.

Many brands have their enthusiasts but Porsche inspires

a kind of loyalty and devotion that stands apart.

I was one of those Porsche people it was like, Okay, these

are not just incredible cars, but they're incredible.

Everything's You know, they're just incredible on so many

levels.

This can be a fascination that begins in early childhood and

continues all through life.

And so the aspirational car was always to someday have a

Porsche. And I set that goal as a kid. As a four year old on

every Christmas every birthday, it was like by the time I'm

let's say I'm 30 by time I'm 30, I'm going to have a Porsche like

that was the goal. That was the aspiration. And fortunately

enough, you know, at the age of 28, I was able to make that

happen with my 1987 911.

One manifestation of this might be the Porsche Club of America,

a club for Porsche owners that claims to be the largest single

Mark Car Club in the United States, with 140,000 members. So

Porsche club America started in 1955, was 12 individuals that

were just trying to figure out their way of how to maintain

these cars that weren't, there weren't many on the road, there

wasn't a large dealer network. Porsche also gets high marks for

reliability, customer satisfaction, and overall

quality. Consumer Reports named Porsche its top brand and 2020.

Porsche also scores highly on JD powers vehicle dependability

surveys, most recently, the study named the 911, the most

dependable vehicle

for the price that you have to pay for a lot of these high

performance specialized low production vehicles, you should

be able to at the very least expect average or better quality

and reliability. But you don't get that with a lot of brands,

Porsche you do, they have got a history of making cars that just

keep going and going.

These vehicles hold their value remarkably well. I've never

bought my Porsches for investment purposes. That's

never, that's never the point to own a Porsche. But it is nice to

know that many many Porsches after a decade of ownership, the

amount of value it retains, and in some cases, their GT cars. We

have owners that have bought their car, driven it for two

years, and dealers right now are calling out and say can we buy

the car back, and we'll give you the money that you paid for it?

So essentially, they've owned that car for free for two years.

That is unbelievable. The Porsche brand is thought to be

so strong, there are questions among investors over whether

it's placed in the Volkswagen Group portfolio allows the brand

to fully unlock its value.

Some people have even contended that Porsche could be worth all

of the W. And the reason is they're looking at Porsche, and

they're saying, this is kind of like a luxury company like our

Mazda or LVMH, or Rolex, and they ascribe that type of

valuation to Porsche and come up with a really high valuation.

The automotive market is crowded even at the higher end, while

Porsche was an early entrant into the luxury and high

performance SUV segments many others have followed. One reason

that this doesn't worry some analysts is that many of those

new entrants are priced just a bit higher than Porsches

offerings. In terms of both price and reputation. Porsche

seems to occupy a relatively under populated niche between

big and accessible luxury brands like Mercedes Benz and BMW and

the very high end brands like Ferrari, Lamborghini and Aston

Martin even the bass nine elevens, which are by no means

cheap seem to exemplify this they perform like supercars and

reliable daily drivers at the same time. A new kind of vehicle

that first found a true home at the high end of the market is

the Eevee and Porsche has taken notice the brand released its

electric tie icon in 2019. The TT icon is already selling about

as well as the 911 Porsches. production numbers are a decent

proxy for sales and Porsche produced about 29,450 tie cons

in 2020, compared with 28,672, nine elevens. Porsche wants to

bring electrification to other models, on its way is the

electric version of the Porsche makhan Porsches biggest seller

worldwide in 2019, and second biggest in 2020. As of June

2021, Porsche plan for half of the vehicles it sells to be

electric or hybrid by 2025. But Porsche says it cannot and does

not want to fully electrify every vehicle. Some cars have

been designed around internal combustion engines and changing

that would compromise their character. This especially

includes the 911 Porsche has spent decades refining the 911

to perform around its rear mounted internal combustion

engine and placement of the engine and powertrain are part

of what gives the 911 its unique driving experience. Porsche says

the answer to this problem is something called e fuel. ie