Background: This is what Porsche is planning in the Middle East: the China replacement

2023-12-03 18:53:18

Background: This is what Porsche is planning in the Middle East The China replacement

Icons of Porsche 2023

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Until recently, China was still the money machine for German car manufacturers, but Porsche, Mercedes, BMW and Co. are now looking for new sales opportunities. There are high hopes, especially in India.

The desert is alive. Once more. In the third edition Icons of Around 27,000 Porsche enthusiasts answered the call to Dubai, almost twice as many as the year before. Despite the crowds, the festival remained friendly under the hot desert sun. The visitors celebrated themselves and their affinity for Zuffenhauser sports cars. “I am pleased that this concept is working so well,” beams Manfred Bräunl, head of Porsche Middle East and Africa, for whom the meeting is a matter of the heart. In the United Arab Emirates, the automotive clock ticks differently. A Porsche 911 GT is considered a standard 911 and in no other region are the extras as welcome as here. On average, Porsche fans spend around 46,000 euros extra on the Swabian House’s table for each vehicle.

Here special programs and off-the-shelf goods are frowned upon. No wonder that the Zuffenhauser Cleverles are turning this individualism into money and have launched the special request program. The demand proves the model strategists right. There are long queues at the Icons stand in front of the special request stand. Porsche is doing well in the United Arab Emirates. In 2022, the sports car manufacturer increased by 20 percent and “we are looking good this year” (Bräunl). The focus is now on the future. Sooner or later, electromobility will find more friends in this region. That’s why the Porsche man has great hope for the battery-electric Macan. “It is important here that the BEVs also feel like a Porsche.” Electric vehicle scenarios are also more likely in Dubai because people drive shorter distances than in the more extensive Saudi Arabia. The charging structure is not as well developed everywhere as in the Emirates. However, Porsche customers in this region usually have more than one car in their garage. When it comes to age, emirate residents fall in the middle. On average, they are in their mid-40s and are therefore ten years younger than the European Porsche drivers, but just as much older than in China.

So it’s all sunshine and roses? Nearly. The Middle East has always been a difficult region, and the current geopolitical situation only complicates the situation. So far everything is going smoothly. Especially since Saudi Arabia is also contributing more and more to economic success. There are encouraging social developments taking place. The fact that women are allowed to get driving licenses in the Islamic country is more than just window dressing. “One in three Porsche customers in Saudi Arabia is a woman”; says Manfred Bräunl. The number of lady drivers behind the wheel of a Porsche is also growing in Kuwait.

The wiry manager probably has one of the most interesting jobs among the Porsche governors. He is responsible for business in 18 countries. In addition to the Middle East, India and Africa. A very heterogeneous area. Except in India, Porsche works with independent importers. So Bräunl shoots a quiet ball? Not at all. The rosy times in China seem to be over and car manufacturers would do well to open up new business areas or regions in order to counterbalance the sales revenues from the Middle Kingdom. This is not only important economically, but also strategically. The Beijing government knows exactly how important its country is in the balance sheets of car manufacturers. But here too, the geopolitical situation is changing and Porsche would do well to base its sales on different pillars.

One country in which Porsche has high hopes to at least partially offset the increasingly risky business in China is India. Around 1.4 billion people live on the subcontinent, around 800,000 of whom are millionaires. “This is an interesting market for Porsche. Indians who have studied abroad and therefore know Porsche are potential customers,” explains Bräunl. Undoubtedly good conditions. But when it comes to Porsche sales, India is still a developing country with homeopathic sales figures and a lot of development work is needed. So Porsche has already opened five new Porsche showrooms this year.

Until now, India was Macan and Cayenne country. That should change and the 911 should find more buyers. “India is investing heavily in infrastructure. “It’s unbelievable what’s happening right now,” says Bräunl. So there will soon be more 911s rolling between Delhi and Mumbai. To this end, he and his team do basic work on lateral dynamics by inviting Indian Porsche drivers to Lapland to have fun on the ice or to the race track for dynamics training. “India will be a good market for us. “However, the trees don’t immediately grow into the sky,” says Bräunl. Porsche is expected to sell more than 1,000 units there this year. Small animals make messes too. However, we are hopeful that we can have a healthy business there,” predicts Bräunl.

A problem that the manager has to deal with every day is the heterogeneity of his region. This is particularly the case in North Africa and South Africa. The country at the Cape of Good Hope has always been a good place for Porsche, while some work still needs to be done in Morocco, Tunisia and Egypt. There are also factors that the salespeople cannot influence, but that make life difficult for them. Among other things, political uncertainties such as the simmering Middle East conflict or unfavorable exchange rates. One South African rand currently equals 0.049 euros. “That makes our cars expensive,” explains Bräunl. But this challenge also needs to be overcome. So it remains exciting.

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