Porsche AG (A) Written Case
In 1998 Porsche was faced with a serious decision, which was whether to move into the sport-utility market (SUVs) or not to. Launching a new model series is always risky for any manufacturer, but especially risky for a such small player such as Porsche who specialized specifically in sports vehicles. The best move, at the time, was definitely to move into the SUV market for numerous reasons.
The SUV’s popularity with US drivers was credited to the nation’s histories attraction for larger cars and trucks that would not only serve as a car for work but one for personal use as well. The original Porsche sporty and aggressive design appealed to those who would never think of taking a car into rough terrain. People like this were young professionals, including working women who preferred not to be associated with station wagon moms. The Porsche SUV was exactly what these kind of people were looking for. Luxury SUVs targeted the high-end market with top quality interior including navigation systems, DVD players, stylish wood and leather, and lowered suspensions. They would be more for the wealthy and ones who wanted the ultimate luxury SUV. Although Porsche’s SUV would join an already crowded market, estimated at about two million units in early 1998, it was bound for success. Wendilin Wiedeking, Porsche’s CEO since 1992, was quoted saying “ We know from surveys that a lot of our customers are waiting for a Porsche SUV. Then there will be no doubt that customers can proudly park their SUV next to a Mercedes S-class and other cars like that.” The average Porsche customer already owned a sedan, an SUV, and a sports car.
Much of the SUV sales boom after 1 ...