Today’s headlines are full of the automotive industry woes due to the current recession which has hit the industry hard worldwide. Two of the big “3” automakers in the United States are on the brink of bankruptcy without a major infusion of taxpayer dollars. Then in early 2009 Porsche, despite also suffering a sales slump, report a nearly $11 billion profit in the last half of 2008. This is also a company that in 1991 was fighting for its own survival. Porsche is now considered one of Europe’s most successful automakers. We’ll take a look at how Porsche has become a premier automaker.
In 1993 Porsche had sold 3,713 cars in the United States. This was about one-ninth the total from the mid 1980’s. This was not good news for an automaker that usually sold two-thirds their production to US customers. Production methods were also outdated with many parts delivered 2 to 3 days late. It took six weeks to complete a car from start to finish. Taking a car from concept to production took a staggering seven years. Porsche was determined to stay alive and independent. CEO Wendelin Wiedeking had been impressed by Japanese lean production methods when he had visited them. Wiedeking was determined to transform Porsche using radical “Lean Manufacturing” methods. He hired Japanese consultants and gave them full reign to make the necessary changes. Porsche then became the model of “just-in-time, just-in-sequence” manufacturing. By 1997 they had cut “Concept-to Launch” from 7 years to 3. It now took a mere 3 days to produce a vehicle from start to finish. In 2001 they had sold over 25,000 cars in the United States which was nearly a total turnaround from the early 1990’s.
This period was the turning point for Porsche. Presently Porsche now holds over 50% stake in Volkswagen and is looking increase that amount. In there fiscal year 2007/2008 they had sold over 98,000 vehicles worldwide. They also have over $20 billion in capitol to work with. In addition to there current line of models(Boxster, Cayman, 911 and Cayenne) they are introducing the four door sports sedan called the Panamera in the spring of 2009. Porsche looks to be in very good condition to weather the current recession. A remarkable feat for a company, that was on the edge of disaster in the early 1990’s.
References:
http://www.ebizq.net/topics/scm/features/5443.html?page=2
http://money.cnn.com/2009/01/26/news/international/gumbel_porsche.fortune/?postversion=2009012706
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