Luxury Brand Porsche Creates a Winning Formula

While some car manufacturers continue to struggle in this long economic crisis, German sports car manufacturer Porsche has surged ahead, posting double-digit earnings and sales growth for 2012.

Despite turbulent times amidst a Volkswagen takeover, the Stuttgart-based company generated revenues of $13.15 billion last year, up 28 percent from the previous year, and achieved a best-in-class operating margin of 18.5 percent, supporting an earnings increase of 22.9 percent.

All in all, Porsche sold 103,245 vehicles in 2012, 20.2 percent more than the previous year, and this figure is set to increase over the coming decade as Chinese and U.S. markets expand.

Porsche’s success is derived from a multi-pronged strategy: going after both high-end niche markets with its luxury sports cars, as well as offering more commercial models like the Cayenne SUV, the Panamera four-door executive car, and diesel and hybrid drivetrains.

And on the other end of the product lifecycle, like most smart automotive manufacturers today, Porsche is heavily invested in its service operations.

This investment has been particularly profitable for the brand because Porsche owners tend to view their vehicles as long-term investments and as such look for ways to keep that investment looking and performing at its best over many years.

Over 70 percent of vehicles made by Porsche are still on the road today, and by meeting the maintenance and service requirements of its vehicles and their owners, Porsche has been able to tap into serious returns.

Since 2006, the brand has made a committed investment in improving service operations, providing myriad top-end after-market services to customers.

Online, customers can fill out individualized service requests, search an extensive technology glossary, and access parts catalogues and technical service information.

Porsche produces maintenance information in parallel with new car launches so repair shops can access the very latest Porsche service information (repair manual, service and technical information, wiring diagrams) online. Service mechanics can also send feedback to Porsche while they are working on a vehicle.

These kinds of services are essential in today’s competitive auto industry, especially for high-end brands like Porsche. Drivers expect that in return for their investment they’ll get fast, individualized services, and there’s a clear correlation between customer retention, customer satisfaction, service margin and service revenue growth.

Find out how Porsche improved its service operations as part of its combined winning formula.


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