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View Full Version : U.S. Sales of Porsche's Cayenne ute decline in '05



benyl
11-22-2005, 01:06 AM
DIANA T. KURYLKO |

Automotive News
Posted Date: 11/21/05

Less than three years since its U.S. debut, the Porsche Cayenne has run out of steam with sales here slumping for the 10th month in a row.

The Cayenne's decline again raises the question of whether Porsche stretched the brand too much with an SUV -- particularly a vehicle with below-average quality scores.

U.S. sales of rival luxury SUVs also are down, leading some dealers and Porsche executives to conclude that the Cayenne is a victim of gasoline prices and the economy. Cayenne sales for the first 10 months of 2005 were 10,907, down 26.5 percent from a year earlier.

Indeed, the Volkswagen Touareg SUV, with which the Cayenne shares a platform and many components, is performing worse than the Cayenne. U.S. Touareg sales are down even more -- 36.9 percent through October.

Other dealers say the Cayenne reached its peak when sales hit 2,075 units in October 2004. They say it's a fashion-statement vehicle that doesn't command the loyalty that Porsche's sports cars do.
The Cayenne isn't due for a facelift until 2007.

Some decline expected

Peter Schwarzenbauer, CEO of Porsche Cars North America, says the Cayenne is a success. With the SUV in its third year, Porsche expected a decline between 10 and 15 percent compared with 2004, he says.

Schwarzenbauer says sales are down more than expected because of high gasoline prices and wobbly consumer confidence.

Unlike the competition, Porsche won't offer cash incentives on its SUV. Considering this, Schwarzenbauer says, "the Cayenne is still doing OK."

Porsche isn't putting on incentives, but dealers are. Art Spinella, president of CNW Marketing Research Inc. in Bandon, Ore., estimates that the average dealer incentive on the Cayenne is between $3,000 and $4,000.

Todd Turner, president of Car Concepts Inc., an automotive consulting company in Thousand Oaks, Calif., says Porsche never should have made an SUV. "It is a me-too vehicle and doesn't fit the brand at all," he says.

But image isn't the Cayenne's biggest problem. Turner says Porsche still hasn't ironed out the Cayenne's quality problems.

"There are problems with electrical bits, pieces not connected tight enough and cooling problems," he says. "Look at a 1-year-old Cayenne, and it looks used. The fit and finish isn't there."

Porsche says its initial quality numbers for October from J.D. Power and Associates show 163 problems per 100 vehicles for the Cayenne, compared with 223 in October 2004 and 233 in October 2003. J.D. Power publicly releases initial quality results once a year and this May said the industry average was 118 problems per 100 vehicles.

By contrast, Porsche's Boxster sports car had 94 problems per 100 vehicles in October, and the 911 sports car had 87 problems.

High gasoline prices sent the sales of many SUVs spiraling downward in the past few months. Cayenne sales fell 46.8 percent in October, compared with a year earlier.

Down, down, down

October was a disastrous month for nearly every brand. But Cayenne sales have been down every month this year, falling at least 20 percent most months compared with a year earlier.

Jerry Nelson, owner of Schneider + Nelson Porsche in West Long Branch, N.J., says unlike Porsche's sports car buyers, "customers who come off-lease of an SUV don't have a great deal of loyalty and move around to whatever is new on the block.

"Cayenne was the hottest thing a few years ago. Now it's whatever else is new. And we don't have a facelift on it yet."

Schwarzenbauer says it's too early to tell whether lessees will go into a second Cayenne because most haven't come off their three-year contract.

He says that initial data show that between 40 and 45 percent lease another Cayenne -- the same rate as the sports cars.

Jim Hall, an analyst with AutoPacific in Southfield, Mich., agrees that luxury SUV buyers aren't loyal, but he doesn't fault Porsche for wanting to attract buyers looking for a bigger vehicle.

Referring to the four-door Panamera sedan Porsche has approved for production in 2009, Hall says, "in retrospect, the sedan looks like a better choice."