Porsche will invest some $1.21 billion to develop a new four-door, four-seat “Panamera” sports coupe with a sales target of at least 20,000 units a year from 2009, it said on Wednesday.
Ending months of speculation, the German luxury carmaker said management and board members had finally given the green light for the hotly anticipated fourth model line, equipped with various front-mounted engines and featuring rear-wheel drive.
The new model, which will likely compete against the likes of the Maserati Quattroporte and Mercedes CLS, is seen as a key element of Porsche’s virtually unparalleled growth story and investors have long factored its launch into their valuations.
“Purely from the product concept of a coupe-shaped, four-door saloon, it’s relatively unsurprising. Porsche had to see what kind of model would fit the brand and would have as little cannibalization effects as possible,” said Thomas Mawick, an industry analyst at Polk Marketing Systems.
“The sales target of at least 20,000 could have actually been higher, since Porsche is known for its cautious guidance. The Cayenne originally had a target of 25,000, whereas last year the company sold nearly 40,000 already,” Mawick said.
While it was too early to speculate on a fifth model line, he said Porsche may want to consider launching a car below its entry-level Boxster, whose product positioning has lately drifted too high.
Porsche hasn’t yet decided where the Panamera will be manufactured, signaling only that it might choose its Leipzig plant in eastern Germany. However, it did say that roughly 70 percent of the car’s content would be produced domestically to ensure customers perceive it as being “Made in Germany.”
Best margins in industry
“We will develop (our) own platform for our fourth model in Weissach,” Chief Executive Wendelin Wiedeking said in a statement, referring to Porsche’s design center.
“A cooperation with another carmaker is not planned. To guarantee the profitability of the new model line, we will work more closely with selected suppliers than before,” he continued.
The Stuttgart-based firm had been considering expanding its range of sporty high-end cars following the smash success of its Cayenne sports utility vehicle, which more than doubled Porsche’s annual unit sales after its 2002 launch.
Regularly a favorite topic of speculation among car enthusiast magazines that splashed computer-generated images of what the car could look like on their covers, the fourth model line was shrouded in secrecy at Porsche.
Already this year the carmaker will roll out its new Cayman S sports coupe, derived from its mid-engine Boxster roadster, as part of its drive to sell 100,000 vehicles a year in the next two to three years, versus 76,827 in the year to July 2004.
A niche player dwarfed by global giants, Porsche built just over 81,000 cars in its last fiscal year -- a fraction of the 5.09 million domestic peer Volkswagen manufactured.
Nevertheless, its industry-leading margins helped Porsche generate a pretax profit of 1.088 billion euros, just 11 million euros shy of Volkswagen’s pretax earnings last year.