"Porsche Sales Are Falling. Here's Why" - Article

[whitex]

it's always both simpler and more complex than most people realize - it's also normally the result of many many years of accumulated decisions that lead to unanticipated outcomes - the wrong end point was arrived at via many many correct individual steps…

Or, it's easier to spin up a juicy conspiracy theory than understand the details. This reminds me of a time couple of decades ago when I personally made a decision to improve our product at Microsoft where I worked at the time - it was based purely on technical reasons, yet a few months later I came across a theory on the internet of how this decision was proof how Microsoft is evil. The conspiracy carefully cherry-picked data, ignoring any points which contradicted it. It was quite amusing to read, though I never tried correcting it (primarily because that would be against company policy, but also because I know from experience that would just cause believers to further dig their heels in).

the ICE automotive supply chain is one of the most flexible and inflexible things humans have ever invented - things happen because of it - and some things can't happen because of it - changing it has massive impacts/costs…

this EV thing is going to shake some things out it's not entirely clear to me VW/Audi/Porsche know what game they are playing or how to win it - but they are very very comfortable doing things the way they always have…we'll see how that goes for them.

it takes courage and vision to walk away from billion dollar working product lines/methods…into an unknown future - and courage and vision is no guarantee of success even if you pursue that path.

EV's require courage and vision - success so far is very very elusive - other than "it's out there" - but not yet proven.

Honestly, I think the problem is a lot more generic. ICE cars have reached a steady state status quo, where they can continue making money by making only minor tweaks - until Tesla came out of the left field with both EV tech and significant computerization of cars. It is not at all surprising that someone who’s been doing the same thing for years*, would prefer to continue doing the same, rather than invest in some whole new technology hoping to continue to make the same amount of money as before (or less, as more competition sprung up recently, both from US as well as China).



*IMO most of carmakers' progress in fuel efficiencies and safety was driven by regulation. Simple example, seat belts and air bags - as long as they were not required, manufacturers preferred to make cars without them, because with those safety features the car's cost goes up. You'd think it's a consumer problem, but actually it's a manufacturer problem. If consumer could afford more for the car, they could have sold them a fancy color or a trim with a special badge instead. I remember the days when airbags were optional, and remember having to wait for my Honda Civic because none of the dealer speced car on the lots had airbags. If it wasn't for fuel consumption mandates, we'd still be driving ICE motors getting with 5 mpg, probably using leaded fuel too - no manufacturer had any incentive to improve it. Worse actually, it was in their best interest that nobody improves it, so they can all continue making money doing the same thing.

 

[D00notD00d]

Yes he was once ranting in 2018 about how with increasing electricity demand, how would we cope with all these EVs.

Narrator -UK grid demand peaked in 2005 and has been falling ever since.

In this video he states that EPAS was introduced for lane keeping so that drivers can be controlled. Honda S2K owners will be amazed to hear that. EPAS was introduced to reduce weight and increase fuel efficiency long before driver aids were even thought of.

Cybersecurity is not related to driver aids, it was brought in to comply with SAE/ISO21434 which itself derives from UNECE R155. This is to improve the *security* of all our vehicles (see Range Rover thefts!!) and not related to driver assists.

Treat him like a ranty op ed column not a source of engineering facts. He's great on classics though and I do love his videos, just puts my blood pressure up from time to time!

(35 years developing cars)

There may be some inaccuracies in the supporting detail, but that shouldn’t detract from the bigger picture argument in the Harry video - that car manufacturers are mostly producing immature and more complex products to satisfy demands from myopic numpty legislators, rather than consumers; and that has a negative effect on private sales of both new and used cars, their reliability, longevity, maintenance costs, desirability and therefore residual values. And ultimately affects business tax revenues, living costs and personal funds, all at a time when public services have never been more over subscribed and in need of more funding.

In parallel, legislators are requiring a shift away from electricity being derived from fossil fuels, plus new grid provision to support charging demand in both far flung and urban places. These new demands also affect revenues and living costs.

Politicians have got the priorities, solutions and scheduling wrong. That contributes to retaliatory public votes for the likes of Farage and Trump.

 

[D00notD00d]

Further to my comment above, legislators should be reviewing why vehicle production in both the UK and Germany is declining- it has fallen by around one third since 2015/16. If you don’t make them you can’t sell them.

 

[whitex]

There may be some inaccuracies in the supporting detail, but that shouldn’t detract from the bigger picture argument in the Harry video - that car manufacturers are mostly producing immature and more complex products to satisfy demands from myopic numpty legislators, rather than consumers; and that has a negative effect on private sales of both new and used cars, their reliability, longevity, maintenance costs, desirability and therefore residual values. And ultimately affects business tax revenues, living costs and personal funds, all at a time when public services have never been more over subscribed and in need of more funding.

In parallel, legislators are requiring a shift away from electricity being derived from fossil fuels, plus new grid provision to support charging demand in both far flung and urban places. These new demands also affect revenues and living costs.

Politicians have got the priorities, solutions and scheduling wrong. That contributes to retaliatory public votes for the likes of Farage and Trump.

The problem is not limited to cars. The problem is people with good hearts are voting for legislating more and more and more luxuries as essentials everyone must have, or, essentially are legislating a higher standard of living (all products get better and safer, people are entitled to more and more services, like healthcare) without realizing that said minimum legislated standard of living cost is above what an average citizen is producing. This of course is creating a deficit of goods and services (money is just a way to exchange goods and services), or in laymen's terms - people cannot afford the minimum legislated standard of living, but now they feel they are entitled to it because the legislators say so. Think back in to the old days, people could afford cars, but those cars had no airbags, no automatic emergency braking, no black box recordings, etc. Today, people expect that with the same amount of work performed, a worker can afford (adjusted for inflation) a way more expensive car, way more expensive home, way more expensive healthcare, etc. A hyperbolic example, let's vote for every American citizen to get the same healthcare as the president of the USA, i.e. have a personal doctor on staff, personal chef cooking healthy meals, and a medical helicopter on standby, personal hospital at home, etc. This would undoubtedly make lives of Americans better, right? But of course it would be unsustainable. So why do we keep on legislating more and more stuff without making sure it's sustainable?

I realize this is not a popular view in a lot of circles, but you can only ignore math for so long. You can try to mask the issue in a short term by printing money, but all that does long term is devalue money. The only way out is to make people more productive, i.e. produce more to afford the desired minimum standard of living. One way to do this is educating the populous - so make education (actual education, not the fluff degrees with negative ROI) affordable, or even free. Sadly, this would be a long term project no politician cares to touch as they would not get any credit for it until after they are retired or dead.

 

[Scandinavian]

Further to my comment above, legislators should be reviewing why vehicle production in both the UK and Germany is declining- it has fallen by around one third since 2015/16. If you don’t make them you can’t sell them.

Well maybe there has to be a demand for them before you sell them?

 

[D00notD00d]

Well maybe there has to be a demand for them before you sell them?

True. Also true, you can’t sell what you haven’t made. And repeating @whitex - why do we keep on legislating more and more stuff without making sure it's sustainable (except the public never vote on the detail). We’re led by donkeys. Or, in the US, Elon Musk.

 

[Scandinavian]

True. Also true, you can’t sell what you haven’t made. And repeating @whitex - why do we keep on legislating more and more stuff without making sure it's sustainable (except the public never vote on the detail). We’re led by donkeys. Or, in the US, Elon Musk.

Maybe but isn’t much of what Metcalfe describes about technology, driven by a completely different generation and market?
If I recall correctly the overall market is 90 million cars per year, when China has a demand for 30 Million and growing. I feel that the Chinese car are developed with a generation in mind that do not even have a driving license age as yet. China requirements are for a lot of features that the old school like Metcalfe and some of us here, do not value or want. And if you want to compete in such a market you need yo satisfy these. Some of the crazy demands come from regulation yes, but not all of them. Not all of these younger generations can afford the higher end cars at the moment but give them a few years.

I feel I see a very similar development in the car market now as we have seen in the high end photography market. When I was young the best camera equipment came from US and Europe , Leica , Zeiss, Hasselblad, Voigtlander. Then the Japanese entered the market and blatantly copied the lot and improved it. Now the Japanese camera industry is facing fierce competition from China as well as new entries like the excellent cameras in phones.

I feel the market for the type of cars that Harry wants is quite limited and then when people try to sell them there is no second hand demand? Not everybody enjoys the simple analogue experience he so highly wishes for??

But maybe I am just an old geezer!

 

[chun]

You are all discussing about the “now”.

Porsche and German automakers are very concerned with the “now”; and the current buyers.

Chinese automakers are very concerned with the future, and the future car drivers and buyers.

And that shows in the final product.

Chinese are developing EVs with technology attractive to younger people, younger generations, irrelevant of their income, developing for all purchasing powers; and always staying on the edge of technology to attract even the youngest and most tech savvy buyer.

That’s the simple distinction and reality Porsche tryes to keep their loyal customers; while Chinese brands are trying to attract new customers.

I’ll even give you an example; beside me, the youngest person invited to test drive the new Macan EVs was 57. Why? I guess new customers are not worthwhile. They release a new 911, who do they invite to the event? 911 drivers… why would they invite possible new customers, right?

it’s a very basic mentality difference

 

[whitex]

I’ll even give you an example; beside me, the youngest person invited to test drive the new Macan EVs was 57. Why? I guess new customers are not worthwhile. They release a new 911, who do they invite to the event? 911 drivers… why would they invite possible new customers, right?

When I attended a Taycan Clinic organized by PCNA in 2022, it was half filled with ~35-45 year olds, mostly Tesla owners.

 

[F1Ruaraidh]

There may be some inaccuracies in the supporting detail, but that shouldn’t detract from the bigger picture argument in the Harry video - that car manufacturers are mostly producing immature and more complex products to satisfy demands from myopic numpty legislators, rather than consumers; and that has a negative effect on private sales of both new and used cars, their reliability, longevity, maintenance costs, desirability and therefore residual values. And ultimately affects business tax revenues, living costs and personal funds, all at a time when public services have never been more over subscribed and in need of more funding.

In parallel, legislators are requiring a shift away from electricity being derived from fossil fuels, plus new grid provision to support charging demand in both far flung and urban places. These new demands also affect revenues and living costs.

Politicians have got the priorities, solutions and scheduling wrong. That contributes to retaliatory public votes for the likes of Farage and Trump.

If you think automotive legislation is created by politicians and civil servants and not by manufacturers, expert panels and engineering association expert boards, then you really don't understand how automotive legislation is created.

Plus EV sales are rising as they are on the used market too. Well worth checking the actual SMMT stats before believing everything Harry says verbatim.

For grid stuff, well worth a catch up on Graeme Cooper (ex-National Grid architect of all the new grid expansion) and his discussion with Chris Harris on Youtube. The grid is not where our problems lie, nor is removing coal.

 

[kempez]

Harry again gives us a perfect example of his bias in his latest car vid. He literally took the worst thing he could have done with this car - tow with it and did it. All because he "noticed it had a tow hook". Instead of saying that would be an impractical choice for an EV and perhaps to avoid specifying it (or maybe suggesting it is more useful for a bike rack), he decided to tow with the Macan and spend his time criticising how impractical that is. Which it is given the current EV space/state of affairs. This isn't a defence of towing with EV's, but it's common knowledge in the car industry that it's very impractical at the moment

Porsche Macan electric review plus why towing with an EV is not good news..

So yes, again I like Harry because he has some lovely old cars and does some things that some people can only dream off (personal chats to Horacio Pagani whilst on a stunning road trip to commemorate Lamborghini!), he is inherently bias in his 'reviews'.

You'll note his bias the other way when he didn't level very much criticism at the latest Maserati Granturismo, despite the cars many faults and very obvious ridiculous pricing (including a £30k paint option!)

 

[D00notD00d]

If you think automotive legislation is created by politicians and civil servants and not by manufacturers, expert panels and engineering association expert boards, then you really don't understand how automotive legislation is created.

For UK law, regardless of which underling produces the proposal and drafts the law, ultimately ministers, secretaries of state, parliamentary select committees and the 2 chambers review, amend, vote on and pass legislation and create statute. Lobbyists represent the vested interests. Indisputable.

Whether they all truly understand it, including all of the implementation dependencies and operational implications, is questionable. Why would parliamentarians know everything about everything?

A good example is the last UK government’s EV sales quotas and fines, which inexplicably, differ from equivalent EU law, the UK’s major import and export market.

For EU law the hierarchy is similar. The EU Commission Directorates, the EU Council and EU Parliaments, not Engineers or Officials, create laws. And lobbyists lobby.

Consumers choose what products, and what product features, they want to buy, not parliaments or manufacturers. It is only a decade since government was giving tax breaks to incentivise ‘clean diesel’ cars.

Plus EV sales are rising as they are on the used market too. Well worth checking the actual SMMT stats before believing everything Harry says verbatim.

I do follow the SMMT UK sales stats. I also subscribe to the global data at https://newautomotive.org/

The situation isn’t exactly as you describe. Whilst EV sales are still rising, the rate of EV sales growth rate is falling. Current sales numbers are insufficient to meet legislative quotas. Recent relative new EV sales growth is largely because overall sales have fallen and heavy discounts on EVs are available, as manufacturers try to meet the legislative quotas. Used EV sales are increasing because, 3 years after the post pandemic wave of new EV sales, more affordable used EVs are hitting the market.

In the big picture, supply shortages, some because of the shift away from ICE development and production, some connected to Ukraine and Russia; price inflation, residual and borrowing rates are other factors contributing to new car sales decline. Contrary to some media, it isn’t just one thing. Problems rarely are.

For grid stuff, well worth a catch up on Graeme Cooper (ex-National Grid architect of all the new grid expansion) and his discussion with Chris Harris on Youtube. The grid is not where our problems lie, nor is removing coal.

I’ve not yet listened to the YouTube reference. Does the ex National Grid architect give an unbiased critique of his own design? What expertise does Chris Harris use to challenge him?

More valid opinions from the sharp end, such Motorway Service Company CEOs and the Octopus CEO, say expansion of grid infrastructure is a business constraining factor on both charger installations and renewables connectivity. Commercial viability and motivation, the Planning Process, Policy and implementation resources are contributing factors.

The National Grid here is owned by Asset Managers such as BlackRock, Vanguard, the Abu Dhabi Investment Authority and global public pension funds, such as Norway. As shareholders their motivation is profit and dividends, not facilitating the implementation of transition laws.

Downstream from the grid, a similar ownership situation applies to energy providers and the suppliers who retail it. My energy provider owner is Warren Buffet’s Berkshire Hathaway. He’s not much bothered when the wind brings down my overhead power line.

Government doesn’t control all of the levers. The 80s UK government sold off control of its national infrastructure and energy provision, impacting energy security and the operation of utilities.

Last year Planning Policy was relaxed to try to address grid expansion blockages. Last month, a National Grid company, the Energy Supply Operator, re-nationalised. Those 2 things would not have happened if grid expansion wasn’t a fundamental part of the transition problem.

The UK legislation which fines car and van manufacturers if they do not sell sufficient EVs is incoherent. It does not recognise their external dependencies: infrastructure and consumer minds. Vehicle Manufacturers can’t be fined for factors beyond their control, that is an unsustainable law. Eventually that realisation will occur.

Government is trying rebuild an aircraft mid-flight. Grid expansion (and downstream energy provision) is a fundamental part of the transition problem. How could it not be? The Grid didn’t previously serve the energy source locations it now needs to serve. Or serve energy providers with sufficient capacity in the locations where they now need it.

 

[Scandinavian]

The UK legislation which fines car and van manufacturers if they do not sell sufficient EVs is incoherent. It does not recognise their external dependencies: infrastructure and consumer minds. Vehicle Manufacturers can’t be fined for factors beyond their control, that is an unsustainable law. Eventually that realisation will occur.

I do not have detailed insight into the UK grid and its operations, but several sources have debunked the notion that the Grid would not cope. It state that there is enough energy available. The issue as pointed out that there is a problem to get the energy to where different interests want to have it. But these stumbling blocks seem also to have been overcome. Far too easy to just blame the Grid.

I do not agree at all with you that manufacturers can not be fined for not selling enough EV’s. If the legislation states they have to sell a certain portion of EV’s they need to provide products tht meet the demand of the public. If they can’t do that they will have to sell less ICE cars to get the ratio correct. So it is just a question on where they want to take the losses?

 

[chun]

I do not agree at all with you that manufacturers can not be fined for not selling enough EV’s. If the legislation states they have to sell a certain portion of EV’s they need to provide products tht meet the demand of the public. If they can’t do that they will have to sell less ICE cars to get the ratio correct. So it is just a question on where they want to take the losses?

Very good point.

Companies seem to think they are entitled to get that "ratio" for free. Well, shocking news, they aren't.
You either have good products, that allows for that to happen, or you get to lose profit by being forced to sell less ICE models;

That's the whole goal of the legislation. You either sell more EVs, or you sell less ICE. Either accomplishes the same result, less pollution. And that's the result the legislation targets.

Honestly, beside germany, which has a massive auto industry, which would understandably be biased and want german automakers to sell a lot; no other country in europe should give a F about how a company reaches the targets of the legislation; there's plenty of options for car manufacturers, and the best will survive the transition to EV. Sink or swim, survival of the fittest and all that.

 

[Spyerx]

getting weary of the number of click-bait articles that are constantly linked here.

these idiots are seldom experts on what they babble about, often recycling the sources, hell half feel like they are AI bots writing them.

Further, they get paid for clicks, so of course they love dramatic headlines.

I personally see the situation as quite simple, firm believe in occams razor:
1. this and multiple industries are finally waking up to a normalized business environment post-pandemic, and that no, the demand they saw from all the free money and bored out of skulls people won't be a BAU expectation going forward

2. EVs are a transition product and despite the desire of certain worldwide economies to push otherwise, most consumers only buy things when they are good enough, and cheap. That is not the buyers here who likely have disposable income higher than 99% of the world's population.

So yeah, the legacy and new automakers will need to adjust. And what will happen? most of the new will die or be absorbed by the legacy. the legacy makers that don't figure it out will be consolidated. I tend to think that porsche/vw/audi will be one that figures it out, but probably not without some pain in the process.