A sporty gene to drive the luxury dream

Porsche China is riding high on China’s rising nouveau riche to fuel the top-end automaker’s growth. CEO Jens Puttfarcken tells Dai Kaiyi a vital company strategy is to lift innovation and cement customer loyalty.

It’s the second time Jens Puttfarcken has set foot in Hong Kong — the last time was 35 years ago when he had just turned 18. As the newly-appointed chief executive officer of Porsche China, he sees the region, which has been the largest single market for the German auto giant for three consecutive years, continuing its strong growth in defiance of nerve-wracking peripheral sentiments.

Puttfarcken is upbeat that 2018 would be yet another record year in China for the Stuttgart-based niche auto brand, which has, so far, sold more than 63,000 cars on the Chinese mainland and in Hong Kong and Macao, notching a 4-percent rise in sales over last year’s.

Chinese customers, usually as young as 36, display a special fondness for Porsche cars — mostly for two-door sports car models, such as the 718 Boxster and 911.

“We’ve an equal share of male and female clients, something that’s very different compared to other markets,” says Puttfarcken, adding that the anticipation of younger and even more female customers on the mainland gives the luxury brand a big tip when it comes to designing future vehicle models.

Hong Kong, on the other hand, has comparatively more sophisticated and educated auto customers who are particularly passionate about the Porsche brand, and the models that customers favor in Hong Kong are much more diversified than they are on the mainland.

Hong Kong’s significance to Porsche China could never be overstated as the brand, with a 63-year history of doing business in the city, commands a 3.7-percent market share — the largest in a single market.

The market share is “unseen” anywhere else in the world and more than four times that of the next largest market, Germany, according to David Xiao, vice-president sales at Porsche China.

To further cultivate customer loyalty in Hong Kong, the luxury auto brand introduced Porsche financial services in this city, aimed at helping to “make the dream of Porsche ownership a reality” for an even greater number of people.

The service, launched in March this year, has seen an impressive performance with a 40-percent market penetration up to this month.

Original ‘soul’

By looking at how over time Porsche’s total product portfolio has evolved and developed starting from the 911 — its most original “soul” first introduced in 1963 — it’s hard to neglect that the genes of 911 and racing have been put into every car model it has brought to the market.

“All of our cars are unmistakably Porsche cars belonging to the same family”, no matter it’s an SUV, a limousine, or a roadster, says Puttfarcken.

The luxury brand, he notes, always embraces competitors in the market as it’s always willing to see new ideas being adopted.

“We’re a sporty company. Therefore, we love to have challenges,” insists Puttfarcken, adding that new competitors and the ever-changing environment will further drive the luxury automaker to seek answers to what it can do in terms of innovation and consolidating customer loyalty.

Contrary to US automotive group Tesla’s move to set up a Gigafactory for its model production in Shanghai to offset the costs piled up by the ongoing China-US trade tensions, Porsche is adamant it should remain an imported niche brand with all its cars developed and produced in Germany.

“I think our customers in China appreciate a luxury premium car as an imported car, not a locally produced one,” stresses Puttfarcken.

Auto fans have much to look forward to in the coming year from Porsche as the premium car producer is the first to offer plug-in hybrid systems in all its flagship models.

Displaying its classic sports car models at the first China International Import Expo in Shanghai early this month, Porsche is to thrust the three pillars into the future in its portfolio — optimized combustion engines, performanceoriented plug-in hybrid models and purely electric sports cars.

Almost all eyes in the industry recently have been on Porsche’s paradigm shift toward electrification with the upcoming Taycan — a brand new all-electric model that Porsche fans will get to have a sneak peek at this year’s Los Angeles Auto Show.

“We believe we’ve enough innovation going on, both on the engine side and on the technology side,” says Puttfarcken.

With a nationwide network of 109 Porsche sales sites, Chinese customers now have easier access than ever to Porsche’s professional services, says the entrepreneur. “By providing a high-tech, interactive digital experience, our customers are able to witness Porsche’s pure sports car spirit unlike ever before.”

Ecosystem buildup

This year marks the 70th anniversary of the Porsche brand. To further develop the auto culture in world’s second-largest economy, Porsche plans to invest, by 2022, 6 billion euros ($6.8 billion) in e-mobility — derivatives of the Mission E concept car, hybridization and electrification on the current model range, as well as on developing a charging infrastructure and smart mobility.

“We’re putting in a lot of efforts here to build up this ecosystem to make it easier for our electrical car customers to drive, to charge, and feel comfortable in the car,” says Puttfarcken, indicating that the whole ecosystem is scheduled to be ready before 2020, leaving the company some 13 months to attain the goal.

“By 2025, we expect to have 50 percent of all cars we produce and sell being either hybrid or purely electrical,” predicts Puttfarcken. “The Taycan is just the very first step for an electrical future for Porsche.”

He has high praise for China’s import duty cuts which went into effect in July this year, suggesting that the move offers Chinese customers a chance to enjoy an optimized price and more personalized options when buying Porsche cars.

The mainland government’s move to open up the market and lower import tariffs has offered Porsche potential room for price cuts. “This is something we would really like to pass on to our customers.”

The company stopped vehicle imports to China at the end of May immediately after the duty cut news was announced, but restarted them on July 1, giving Porsche’s customers the “full benefits of this 10-percent tariff reduction,” and resulting in sweeteners being offered to customers in the form of a 7-percent cut in the MSRP (manufacturer’s suggested retail price).

“That’s why in the first six months, we had a little bit less cars delivered to our customers compared to last year,” explains Puttfarcken. “But, we were able to pick this up in the following months, and by the end of this year, we’ll definitely end up with a number which is higher than in 2017.”