Porsche is Succeeding in North America Where Most Automakers Fail: Sedans
You can always count on the German automaker to thrive in the middle of a downturnby Kirby Garlitos, on LISTEN 07:53
The U.S. sedan market was brutal in 2018 for a lot of automakers. But don’t tell that to Porsche; the German automaker is buckling all trends after posting its seventh straight year of record-breaking sales in North America. You would think that the Porsche Cayenne SUV and the Porsche Macan crossover would be spearheading that record growth, but that’s not the case. No, no, no. Of all models, it’s the Porsche Panamera sedan that’s pulling Porsche’s sales sleigh. The four-door saloon not only escaped 2018 with a downturn in sales; it completely went the other way with a 19.5-percent sales growth compared to its sales volume in 2017. While it still looks like the sedan market in the U.S. is steadily losing steam, Porsche remains immune to the trend. Don’t expect it to lose steam, either, now that the Taycan sedan is arriving this year.
Did you see this coming? There might be some of you that probably did, but for the most part, it is surprising to hear that Porsche is succeeding in a market that has suddenly gotten cold on sedans in recent years. Think about it a little deeper, though, and you might realize that this news isn’t that surprising at all, largely because Porsche’s market is different from that of an average sedan customer, or what was once a sedan customer.
First, let’s look at the numbers.
In 2018, Porsche sold 8,042 units of the Panamera in the U.S. Not only is it a healthy sales number, it’s a record-breaking sales haul for the sedan, beating out the previous record that was set in 2012 when Porsche sold 7,614 units of the Panamera in the U.S.
More importantly, last year’s sales haul represent a stunning 19.5-percent increase from its year on year sales number. Porsche sold 6,731 models in the U.S. in 2017. To give this story an even stranger twist, the Porsche Cayenne SUV, the model that’s supposed to be thriving in this SUV-driven market, experienced a drop in sales in 2018 with only 10,733 models as opposed to 13,203 units in 2017. That’s an 18.7 percent year-on-year sales decline. Widen that picture and you’ll realize that sales of the Cayenne in the U.S. market have been dropping steadily since 2013’s record haul of 18,507 units.
On the surface, it appears that Porsche is living in a bizarro world where sedans remain kings over their SUV counterparts. But, really, this isn’t so much about Porsche living in an alternate universe as it is an evolving identity that places a premium on its luxury sedans. A big part of that is the market Porsche belongs in. Once upon a time, the German automaker was regarded as a performance brand that dabbled on SUVs every once in a while. But the Panamera’s arrival in 2009, and subsequent popularity flipped that narrative. Suddenly, Porsche wasn’t just a performance brand; it was a well-rounded automaker that produced high-quality vehicles across multiple segments.
Affluent customers who typically went to Mercedes-Benz, BMW, Audi, and Jaguar to satisfy their luxury saloon needs suddenly had the Panamera staring at them in the face.
It certainly helped that the Panamera arrived as an all-world model that checked off all the requirements these customers wanted out of a premium four-door sedan.
To its credit, Porsche has maintained that identity throughout this decade. It’s still capable of producing some of the most desirable performance machines in the world — the 911 remains an icon through and through — but it’s become more than that now. The Panamera is the poster boy of Porsche’s evolution, which is why demand for the luxury saloon remains high in its segment, even if the entire sedan world is buckling under the pressure of the SUV onslaught.
Consider this: the BMW 7 Series, one of the Panamera’s chief rivals, routinely outsells its Porsche counterpart in the U.S. Those races haven’t even been close. The 7 Series is just more popular, in part because it’s one of BMW’s marquee models and it has a longer history and pedigree than the Panamera.
But all that changed in 2018 when BMW “only” sold 8,271 units of the 7 Series in the U.S. market, a 12-percent drop from its sales figure in 2017.
Do the math and the 7 Series outsold the Panamera by a mere 229 units. Granted, there are mitigating circumstances behind this.
Perhaps BMW customers started hesitating on buying the 7 Series when Bimmer announced the arrival of the 8 Series back in July 2018 at the 24 Hours of Le Mans race. Sales data can back that up, too, as sales of the 7er in the U.S. were actually trending up until September 2018 when sales started plummeting. You also can’t discount the arrival of the second-generation Panamera in 2017 as a catalyst for the model’s record-breaking sales. The all-new model packed every new technology Porsche had at the time, helping turn the second-generation Panamera into a technical masterpiece. You can’t deny that a car as good as the Panamera won’t attract customers in the U.S., specifically those who can afford it.
You also can’t deny that Porsche’s current approach of building around sedans isn’t working. The Panamera is leading the charge today, but before long, the all-electric Taycan will take that mantle and run away with it, albeit quietly. It’s not an accident that when Porsche was building its all-electric vehicle strategy, it went with a four-door performance sedan as its carrier model, not an SUV or a light truck. It’s a bold strategy — Mercedes is doing the opposite with its EQ electric-brand as the EQC crossover arrives first in the market — but it’s not a strategy that was born from happy thoughts and good vibes. Porsche knows that even if crossovers and SUVs have dominated the auto sales scene in recent years, Porsche’s key market isn’t as dependent on SUVs as the average American buyer is.
That’s the luxury — literally and figuratively — that Porsche has that mainstream companies like Toyota, Ford, and General Motors don’t have.
You can say the same thing for Mercedes, BMW, and Audi, even if they belong in the same level as Porsche. They’re mainstream. Porsche isn’t. They need SUVs to balance out their sedans. Porsche doesn’t.
As it is, many expect the Porsche Taycan to blow up the all-electric sedan scene. It’s that good of a car, at least based on initial reviews about it. The hype is real, too, as is the demand. Porsche has even said it wants to double its planned Taycan production to 40,000 units per year, more than all North American sales of its SUV models combined. And that’s considering that the Taycan’s starting price sits at around $90,000, a little higher than the $85,000 base price of the current Panamera.
So, is it really surprising that Porsche’s performance in the North American market is sitting on the broad shoulders of the Porsche Panamera? It might seem that way on the surface, but if you really think it through, Porsche’s performance in the North American market isn’t so much about the Panamera itself as it is in the prestige and demand that comes with owning a Porsche model.
Electric or not, Porsche builds machines for drivers and enthusiasts, and it builds these machines about as well as any automaker in the business today.
Is it still a performance brand? Sure, but it’s become more than that, too. Porsche has become a go-to brand for all of our luxury and performance car needs, whether it’s a coupe, an SUV, or in this case, a sedan like the Panamera and, soon enough, the Taycan.
2019 Porsche Panamera Drivetrain Specifications
|Panamera 4S||Panamera Turbo|
|Engine||2.9-litre V6||4.0-litre biturbo V8|
|Output||440 HP @ 5,650 RPM||550 hp @ 5,750 RPM|
|Torque||405 LB-FT||567 LB-FT @ 1,960 - 4,500 RPM|
|0 to 100 km/h||4.4 seconds
(4.2 seconds with the Sport Chrono Package)
|3.8 seconds |
(3.6 seconds with the Sport Chrono Package)
|Top Speed||289 KM/H (180 mph)||306 km/h (190 mph)|
Read our full review on the 2018 Porsche Panamera.
Read our full speculative review on the 2020 Porsche Taycan.
Source: Financial Post