MUNICH—Last week, German automaker Porsche SE increased its forecast for the full year, sending a positive message to the market after a disappointing negative performance slump over the last two years.
Over the span of the last two years, Porsche has experienced a series of setbacks including an unsuccessful takeover of Volkswagen, high debt, and many lost legal battles that led to huge financial difficulties that almost brought it to bankruptcy.
To the surprise of many analysts, Porsche posted a lower than expected loss of less than $1.2 billion in the current fiscal year ending in July. Its impressive operating profit of 12 percent increase from last year is among one of the auto industry’s highest.
This positive news is mainly based on the fact that Porsche had seen pleasantly higher-than-expected sales of its brand new Panamera sedan model, amounting to 13,906 sold in its first year. Although Porsche’s other models such as 911 and Cayenne recorded double-digit yearly decreases, thanks to Panamera’s high price (starting at $117,000), the company’s overall revenues have remained high.
“These are good numbers,” said Daniel Schwarz, an analyst at Commerzbank AG in Frankfurt in a Bloomberg interview. “The Panamera is proving a boon to Porsche’s car business. They’re doing better than expected,” he said.
In a recent study by U.S. market research firm J.D. Power and Associates on the initial quality of new cars, Porsche was placed at No. 1 in premium sport cars category. Its brand new Panamera model came in third place in the “Large Premium Car” category.
“The high level of customer satisfaction at Porsche is the result of our consistent quality strategy, from development to production and sales, which we are continually improving,” said Porsche’s CEO Michael Macht in a statement. “Current proof that we focus strictly on customer requirements is also our Gran Turismo Panamera. Its excellent rating performance in the J.D. Power study highlights its top class,” he added.
Porsche has seen the worst luck trying to acquire its much-larger rival Volkswagen. It tried a hostile takeover of Volkswagen in 2008 by acquiring a majority stake, but the attempt failed as credit markets turned sour. Porsche, all of the sudden, didn’t have enough money to sustain its own operations, even less that of a much-larger Volkswagen. In order to save Porsche from going bankrupt, Volkswagen has offered a merger and purchased back some of its own stock from Porsche.
Porsche’s latest positive revenues are giving it a hope to merge with Volkswagen by 2011. It expressed its plans to have a large capital increase by 2011 to make a merger possible.
“The executive board of Porsche SE is convinced that the merger with Volkswagen AG will come about,” a spokesperson from Porsche said.
If a merger is successful, it would place Porsche as the 10th brand in Volkswagen’s stable that already includes Audi, Bentley, Skoda, Bugatti, and others. Both Porsche and Volkswagen are family-owned companies, which even have relatives working among the board of directors of both companies.
Over the span of the last two years, Porsche has experienced a series of setbacks including an unsuccessful takeover of Volkswagen, high debt, and many lost legal battles that led to huge financial difficulties that almost brought it to bankruptcy.
To the surprise of many analysts, Porsche posted a lower than expected loss of less than $1.2 billion in the current fiscal year ending in July. Its impressive operating profit of 12 percent increase from last year is among one of the auto industry’s highest.
This positive news is mainly based on the fact that Porsche had seen pleasantly higher-than-expected sales of its brand new Panamera sedan model, amounting to 13,906 sold in its first year. Although Porsche’s other models such as 911 and Cayenne recorded double-digit yearly decreases, thanks to Panamera’s high price (starting at $117,000), the company’s overall revenues have remained high.
“These are good numbers,” said Daniel Schwarz, an analyst at Commerzbank AG in Frankfurt in a Bloomberg interview. “The Panamera is proving a boon to Porsche’s car business. They’re doing better than expected,” he said.
In a recent study by U.S. market research firm J.D. Power and Associates on the initial quality of new cars, Porsche was placed at No. 1 in premium sport cars category. Its brand new Panamera model came in third place in the “Large Premium Car” category.
“The high level of customer satisfaction at Porsche is the result of our consistent quality strategy, from development to production and sales, which we are continually improving,” said Porsche’s CEO Michael Macht in a statement. “Current proof that we focus strictly on customer requirements is also our Gran Turismo Panamera. Its excellent rating performance in the J.D. Power study highlights its top class,” he added.
Porsche has seen the worst luck trying to acquire its much-larger rival Volkswagen. It tried a hostile takeover of Volkswagen in 2008 by acquiring a majority stake, but the attempt failed as credit markets turned sour. Porsche, all of the sudden, didn’t have enough money to sustain its own operations, even less that of a much-larger Volkswagen. In order to save Porsche from going bankrupt, Volkswagen has offered a merger and purchased back some of its own stock from Porsche.
Porsche’s latest positive revenues are giving it a hope to merge with Volkswagen by 2011. It expressed its plans to have a large capital increase by 2011 to make a merger possible.
“The executive board of Porsche SE is convinced that the merger with Volkswagen AG will come about,” a spokesperson from Porsche said.
If a merger is successful, it would place Porsche as the 10th brand in Volkswagen’s stable that already includes Audi, Bentley, Skoda, Bugatti, and others. Both Porsche and Volkswagen are family-owned companies, which even have relatives working among the board of directors of both companies.
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