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4Ps
Porsche’s unknown gears
It won over India’s back-seat drivers with the Cayenne; now the super-luxury carmaker wants to snatch market share in the mainstream luxury saloon segment. 4Ps B&M’s Karan Mehrishi wonders whether Porsche has a chance...
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 Ever wondered why 911 is perhaps the most recalled number ever? No silly... it’s not just because of the brutal terror attacks on Uncle Sam’s land; instead, 911 is the life-saving emergency services number for many stranded drivers in America. But that’s the masses stuff; for a section of the classes however – at least those affected by a rare condition involving an overactive adrenaline gland – 911 is another code for thrills! Perhaps the most coveted sports car in the motoring world today, Porsche’s 911 is at the forefront of every comparison test that doubters throw at it. Pitted against every new car with racing pretensions, the 911 effect has ensured that the Bavarian major is today counted among the highest valued automotive companies ever with record profits at the banks.
But surprisingly, when Porsche came to India in 2006 (with exclusive dealers in New Delhi and Mumbai), the 911 was not centre stage in their strategy. Even though Porsche likes its marketing and branding strategy to revolve around the 911, the product which really defines the company’s presence in India today has allegiance to a very different segment altogether; that of SUVs! The Cayenne, a high performance SUV, slowly but steadily replaced the 911 as the front-liner for Porsche, at least in its India arsenal. But winds of change are blowing again with the Porsche Panamera (a four-door saloon) slated for a simultaneous global and India launch by mid-2009 - proof perhaps of India’s growing importance in Porsche’s global strategy. With markets in the US, Europe and elsewhere gradually turning bearish, the bullish growth of India’s luxury car mart is a reason enough for the carmakers high hopes. In an exclusive to 4Ps B&M, the Porsche India MD, Rod Wallace, shares the excitement. “We are encouraged as sports cars continue to grow in sales and popularity. We sold 101 cars in 2007. Figures for 2008 came close to the 200 mark, making for good y-o-y growth in sales,” he gushes.
The Panamera promises to change the perception of Porsche globally. In fact, buzz is that the high performance luxury saloon will take Porsche within striking distance of well established luxury carmakers like Mercedes-BMW-Audi-Maserati. While the 911 is for the adrenalin crazy speedster; the
Panamera is positioned as the traditional four-door luxury-on-wheels with high performance to boot. Its launch is expected to expand Porsche’s consumer base and brand appeal by leaps and bounds.
But the ride may not be as smooth for the Panamera in India. Unlike other markets, luxury brand perception in the country is extremely deep rooted. For niche Indian consumers, brands like Rolls-Royce, Bentley, Mercedes Benz and BMW still form the epitome of luxury saloon ownership and sales figures provide some stark realities. As per SIAM data, the super luxury car market in India is roughly close to 5,000 units (April- November 2008-09, two quarters); and more than 80% of the sales come from Mercedes and BMW alone (even in the A6 segment)! But can Panamera enable Porsche to break into established consumer mindsets? There are no easy answers to that, but given that Porsche has actually ‘been there-done that’ with the Cayenne over the last two years of its India journey; it well has the wherewithal to replicate the positioning success again.
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 Porsche realised early on that if it wants to expand in developing markets in Asia, Eastern Europe and North Africa, the 911 would definitely not do the trick. Sports cars, which can barely seat two, still attract a niche audience and may not find many takers here. The Cayenne, a product which offers flexible seating arrangements and scintillating performance can double up as a sports car and family sedan on a need basis. In Cayenne, Porsche found a versatile product which could be marketed as a mass (still niche though) product that the market would readily accept. Porsche was right. The market was receptive of Cayenne and Porsche’s brand appeal acted as the catalyst.
So the Stuttgart based manufacturer sweetened its India entry by projecting the Cayenne as its core brand – shifting the focus away from its super-expensive sports car 911. Today, Porsche is selling more Cayennes in India than ever before. In conversation with Ashish Chorodia, CEO, Porsche India, 4Ps B&M learned that the Cayenne contributed 65-70% of Porsche’s volumes in India, with the balance contributed by the 911 range (Carrera, Carrera S, Targa, Turbo), Cayman and the Boxter range. Thanks to the success of Cayenne, from 100 cars in 2006, to about 120 units in 2007, Porsche’s sales figures have zoomed to 200 cars in 2008 – astonishing figures for any expensive marque. Ashish is quick to point out that “Sports cars like the 911 and Boxter are also catching up fast in the country,” but undeniably the Cayenne is Porsche’s best selling model with a major share of the overall luxury SUV market. Says Wallace, “Cayenne is suited to Indian driving conditions and from the day it entered our showrooms, it has been a success.”
Clearly, Porsche believes in an extremely progressive branding strategy. It does not hesitate in creating brand new segments - as it did with the Cayenne (a high performance/ luxury SUV), a positioning which had no equal at the time. A similar adaptable branding strategy may be in store for the Panamera - taking its appeal to an even wider set of consumers. “It’s the symbiosis of a sports car DNA derived from the looks of a coupé, the unique interpretation of the classical sedan body and the benefits of a variable space concept,” avers Wallace, while describing the new four-door offering from Porsche’s stable. Not intending to venture far from his previously successful marketing strategy, Wallace is banking on direct communication with his select customers to recreate the magic. The car maker has already sent brochures of Panamera to an elite few prospective customers. But the game’s gonna be tougher this time as the Italian sports-car major, Lamborghini is bringing the Estoque, its own version of a luxury/sport saloon, potentially a direct threat to the Panamera.
As a Porsche representative puts it, “We have a bag full of ideas for India. But we will look at the market closely.” In India, Porsche intends to change the branding game forever with its innovative positioning exercises. With the Cayenne, the company more than proved its credentials; now it’s the turn of the Panamera. It’s just a matter of dealing with competitors who enjoy an enormous first-mover advantage. For the elite Indian, the back seat of competition originating somewhere else in Stuttgart (read: Mercedes Benz) just seems cushier!
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4Ps
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