Is it important to a buyer where a car is built? Well, it seems to be for Porsche customers in China, so much so that the brand has nixed the idea of assembling cars in its largest – and most profitable – market despite the potential of significantly increasing its sales numbers through such a move.
As the Financial Times reports, the Stuttgart-based automaker says it will not build a factory in China despite struggling to ship enough of its German-made sports cars to meet a surge in demand from Asia that came about at the end of last year.
China is a huge market for the company, which accounts for about 40% of VW Group’s annual profits. Ten years ago, the brand was selling less than 100,000 units globally. It sold 272,162 cars in total last year, of which nearly 90,000 units came from China, the only big market in which it registered growth during a pandemic-ravaged 2020.
However, CEO Oliver Blume, who also sits on the board of Porsche’s parent company Volkswagen, said Porsche did not have sufficient reasons to justify localising production in China. “Today, it doesn’t make any sense [to move production],” because “it is a quality and a premium argument still to produce from Europe for China,” he explained.
He added that it was worth absorbing higher costs for the cachet of the “Made in Germany” brand among buyers. “That’s also the feedback we got from our dealerships and from our customers,” he told the publication.
Citing the all-electric Taycan, which is produced in the same factory in Zuffenhausen as the 911, Blume said this sent a “strong signal” to customers that the car, which sold 20,000 units last year, was “engineered and made in Germany.”
However, while Blume maintained that a European base was a “win-win situation” for Porsche and a “strong signal for investment” in the region, he said market forces could change the group’s global footprint in the future. “In 10 years, I don’t know. It depends a lot on how volume develops and also the regulations in each country,” he said.
All this comes in the wake of a report earlier this month that Porsche is said to be setting up assembly operations in Malaysia. It’s not the first time Porsche has built its vehicles elsewhere, with Cayenne production at Volkswagen’s factory in Slovakia being the prime example, but this would be the automaker’s first plant outside of Germany. It is likely however that production in Malaysia would not incorporate more than simple assembly operations.
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No – Made in China
Yes – Made in Kulim
Dap will make noise or not…dont play2 with chinese ok…
The reality is that China doesn’t know how to make genuine sports cars. Porsche is probably wary of potential IP theft if they build in China. Also, production cost isn’t as critical of a factor when it comes to sports cars. Some people are willing to pay whatever the cost for the best possible product. China might have cheaper labour and the largest economies of scale, but when it comes to sports cars, this advantage will not help as much.
Local monkeywrenchers better in Msia.
Make in Malaysia and export to China lo
Ini statement paling win!
if materialize, how bout “Made In Kulim” tag??
How about made in Kulim tag then.
say no to china. say yes to make in india.
yes suzuki swift sport pls but not made in india pathetic
How do the writer knows the Malaysian operations most likely would not incorporate more than simple assembly operations?
When people wants to invest, then look down on the investment.
When people not investing, then blame govt.
Porsche also said they aren’t going into electrification, but we seen this didn’t turn out what they said. No doubts they would backtrack on this statement eventually.
Lucky for Porsche. The day the first car comes from China is the beginning of its death. People do not associate luxury or sports cars with China. Even China people wont buy it. This is not powerbank or handphone case.
It is foolish not to go into China as even Tesla is there now. If their Taycan even want to compete with their offerings, Posh have no choice but to go in as well.
when it comes to handphones, the PRC chinese still love iphones. Heck even Huawei’s CEO and his family praise Apple and even use their products.
If they want full functionality they had no choice really since Android service has been crippled by the pull out of Google from China.
They use it so that they can experience for themselves the good n bad for tht product.
Understandable. Reasons to buy a Porsche are different than buying, say, a Toyota. At this point, ‘Made in China’ does not have the same prestige as ‘Made in Germany’ yet.
Does cheaper modules made in developing countries make the car less desirable though? If they are not engine/chassis essential parts, like headlights, some casings or even the bumpers, they probably won’t.
actually.. Porsha can always bring assembly in Malaysia. we do have German in Johor.. (Jementah). we also have London in Melaka (Lendu).
we have New Zealand in Pahang (Felda Kg New Zealand in Maran). we have UK in klang valley (ulu klang) and we also have Taman England in seremban.
England does not have Seremban Park there. we are more unique and special.
Very good.. cause china made is terrible in quality.. they just do fast2 n want to gain profit..
It’s just a matter of time before Porsche gives in to the cheap cost in China. They can easily convert a VW China plant into Porsche.
lousy car, cheap honda beat them to death in every single point