It’s a view held by many that Germany produces the best cars. I’m not so sure that’s true anymore, but at least Germany produces the best car industry gossip. This week’s tea is all about the mess that new Porsche CEO Michael Leiters is stepping into as he takes over the company.
The world is nothing if not complex, and Leiters deserves a chance to untangle some of the complexity. A lot of this has to do with the revision of goals around electric cars, which is extraordinarily complex in Porsche’s now most important market: USA! USA! USA!
Sorry, The Morning Dump has Olympic fever today.
Better to focus on what Americans are doing in Italy than, say, what the courts might do back here to continue to cause a mess for automakers. One strategy at play is from GM, and that’s to keep fewer cars in inventory in order to maintain profitability. This makes sense to me. Renault is running a slightly different strategy, betting it can expand its footprint and taking the profit hit in the near term.
Porsche At 180,000 Cars Is Probably A More Fun Company Than Porsche At 400,000 Cars
I don’t want to be too critical of VW CEO Oliver Blume, who went from CEO of Porsche to CEO of both companies. Many of the problems Blume had to face were inherited ones, and Porsche expanded rapidly under his tenure. It went public. It made billions of dollars.
None of that is easy, even if Blume had the good timing to be in charge at that sweet moment in time for German automakers when Chinese consumers had money to spend, but not as many interesting Chinese vehicles to buy.
Still, the “dual role” of VW and Porsche CEO was never going to last, and the world jolted abruptly under his feet. China built up its industry, the planned electrification of the world hit a snag, and a global sales environment in which Porsche sold 400,000 cars, as Blume planned, suddenly seems remote.
There were a lot of discussions about who might replace Blume, and the boss reportedly had his own ideas. Given the lack of success of Blume’s previous appointees (ahem, Döllner), Porsche’s board went with someone from outside of the Volkswagen CEO’s circle when it appointed ex-McLaren CEO Michael Leiters.
As I often do, I’m leaning on Germany’s Manager Magazin for the gossip from Wolfsburg. There’s a new big feature about the inner workings of the company, and there’s too much to talk about, but here’s what struck me:
He made it clear to his people how he operates: Everyone gets a chance. Leiters wants to understand the true situation. Only then will he take action.
He demanded that his top management present him with the facts: anyone with problems that were not yet known should come forward immediately. Leiters granted a 20-day amnesty. That period has ended.
Several companies have contacted the company, according to sources in Stuttgart. Sales, for example, were less optimistic than at the end of 2025, lowering their forecast for the current year by around 10,000 to just over 250,000 cars.
That little bit about amnesty, with no context, probably sounds dire. I don’t think it’s quite all that bad. Given how public many of the company’s issues have been, including the numerous expensive delays around the electric Boxster, I’m guessing Leiters wasn’t predicting a smoking gun.
Instead, this sounds like someone trying to figure out how to better position Porsche–still an incredibly strong brand–in a new world. This other bit also caught my attention:
Oliver Blume had planned for Porsche to sell around 400,000 cars, and built up the workforce accordingly. Everything was based on the experience of the past 15 years: those who invest heavily and expand ultimately rake in billions. Blume expanded the plant in Zuffenhausen, significantly increased production in Leipzig, and also boosted development. Porsche AG now employs around 42,000 people. In 2015, the figure was just over 25,000. At that time, Porsche sold 225,000 cars. By 2027, the number could fall to a similar level. Works council chairman Ibrahim Aslan (52) has already made a less than enthusiastic demand to secure jobs in Zuffenhausen with a new model.
New models, that much is clear, will not be forthcoming for the time being. Many ideas and speculations are circulating: building the 718 as a combustion engine vehicle instead of an electric one, shelving the luxury SUV K1, perhaps having a model developed locally for China? Maybe even a new supercar, after Blume halted the last attempt. Leiters doesn’t want to make a hasty decision.
Porsche in 2015 was, to me, a more interesting company. I’m just not enthused by an EV Macan, and while a 911 T is as great as it ever was, the focus on EVs seems to have led the company to drift away from its core competencies. This isn’t to say that I’m not excited about a new Taycan, as the Taycan is one of the few fast EVs that feels right, but a giant three-row SUV? I think I’d rather have the supercar.
While a lot of Manager Magazin pieces are full of backbiting and backstabbing, it does sound like both Blume and Leiters are trying to set up a relationship of mutual respect and assistance, if not exactly close cooperation.
Volkswagen needs Porsche to be a success, and Porsche needs Volkswagen, period.
We’ve FA’d, Now We’re Going To FO
For all the hand-wringing around the Republican attempts to roll back decades of environmental regulation, until all the lawsuits are done, it’s not clear what will happen, to say nothing of what happens in the next two elections.
The biggest shoe left to drop is whether courts will go along with the revocation of California’s waiver to set its own environmental standards, a long-accepted policy that is mimicked by a bunch of other populous states. This would set up a system where automakers would basically be forced to either build cars for those states and cars for everyone else or, perhaps, just build cars for a much stricter emissions standard.
Here’s a fun quote from a Reuters analysis of the problem:
Mike Murphy, a former Republican strategist who co-founded the advocacy group EVs for All America, said the California-federal standoff highlights how automakers are being “whipsawed” by political shifts that upend their model-development and manufacturing plans. Since Trump’s election, automakers have taken $55 billion in writedowns on EV investments.
“What I hear from all of them is, ‘This short-termism is killing us,’” he said. “We have a monkey at the controls in Washington, and it’s very hard to plan.”
White House spokeswoman Taylor Rogers called California’s lawsuit “frivolous” and said Trump has “canceled unpopular green-energy subsidies that wasted Americans’ hard-earned tax dollars.”
There are some weird areas of consensus between environmentalists and this administration, however, as both have long opposed the government handing out unreasonably generous estimates of how EVs contribute to overall fuel economy averages. The Trump administration is eliminating this bit of regulation, with some interesting support, as The Detroit News reports:
Groups like the Natural Resources Defense Council and the Sierra Club lobbied the Biden administration to eliminate the so-called “fuel content factor,” a multiplier that inflated on-paper mpg ratings for EVs. Those ratings figure into fleetwide averages under federal Corporate Average Fuel Economy rules.
The NRDC and Sierra Club jointly argued in a 2021 petition to the DOE: “Excessively high imputed fuel economy values for EVs means that a relatively small number of EVs will mathematically guarantee compliance without meaningful improvements in the real-world average fuel economy of automakers’ overall fleets.”
This is one of those situations where I can see both sides of the issue. For decades, the assumption was fuel economy rules were going to get stricter. In order to help out automakers, various administrations encouraged ways around that, including by giving more credit for certain technologies. This is how we ended up with stop-start.
Rationalizing the way the government measures fuel economy is probably a net good, right up until the point that a new administration decides to put them back in place. Imagine having to hit a high standard and not getting a break?
GM Isn’t Going To Flood Dealerships With Cars
Of all the former Big Three automakers, GM seems to have learned the most from 2008 and has, for the most part, slowly made the kind of improvements that once seemed difficult to achieve.
A big one is how to manage volumes. The old way, pre-pandemic, was to just produce cars at a huge clip all the time. When demand was high, this meant selling a lot of cars, but when demand waned, this resulted in large swings in profitability due to a need for huge incentives.
As GM CFO Paul Jacobson told a crowd at a conference this week, the company is now carrying about “30 to 40 percent less inventory” than it used to, which might allow it to get off this crazy ride.
Per Automotive News, it seems to be working:
Most GM brands have less inventory than the industry average, according to a Feb. 12 estimate by Cox Automotive. Chevrolet, GMC and Cadillac each had less than the industry average of 98 days of inventory, while Buick was at 115 days, according to Cox.
GM executives have said they aim to keep vehicle supplies between 50 and 60 days. That’s a marked change from before the pandemic, Jacobson said. The pandemic and the ensuing microchip shortage, which each led to widespread parts shortages and factory shutdowns, forced GM to learn how to move quickly and nimbly with less inventory available, he said.
The company cannot stop the cyclical nature of the auto industry, Jacobson said, but by no longer sitting on as much as 120 days of inventory, GM can “get rid of self-induced cyclicality.”
Seems smart to me.
Renault Is Going To Take A Margin Hit
If GM is the American automaker that’s gotten through the wild ride of the last few years the most unscathed, the same can probably be said of Renault in Europe. Somewhat quietly, Renault has managed to keep profits and grow in a mostly tough market.
Given the company’s reliance on Europe, it looks like it’s going to get tougher. Chinese brands are infiltrating the continent and offering low prices. Renault, though, has its own affordable and enticing EVs, and it seems like the plan for now is to eat some profits in order to maintain an edge.
CEO Francois Provost explained some of the logic to Bloomberg:
The French manufacturer sees an operating margin of around 5.5%, it said Thursday. That’s below analyst projections and compares with 6.3% last year. Renault, which plans to expand in Latin America and Asia, proposed a flat dividend of €2.20 ($2.59) a share.
Chief Executive Officer Francois Provost has walked back several decisions by his predecessor Luca de Meo to cut costs. He’s reintegrated Renault’s EV and software arm Ampere, discontinued some mobility businesses and slashed costs at the Alpine sports-car brand. The moves are meant to make the company leaner amid mounting competition from Chinese manufacturers in Europe.
“We changed what is needed in this very disruptive environment,” Provost said in an interview with Bloomberg Television.
Maybe just keep making the Alpine A110 forever?
What I’m Listening To While Writing TMD
Here’s one for the Gen Xers. It’s The Breeders with “Safari.”
The Big Question
What should the next new Porsche be?
Top graphic images: 20th Century Fox; Porsche
Porsche’s prices are out of touch. They used to offer attainable cars – sure they were a little expensive, but they weren’t nipping at the heels of Ferrari or Aston Martin or Lamborghini. Further, they didn’t play the same allocation games that Ferrari has always played and Porsche now apes. If I, a guy squarely in the demographic to buy his first new sports car, wanted to, I could just saunter into any Porsche dealer and order what I wanted and paid sticker. No issue, no markup, no “how many new Macans have you bought to deserve this 911 allocation” BS.
I’m in the market for a used 911 or 987 Boxster/Cayman. The MSRP on those cars is astonishing compared to today’s market. Sure, inflation plays a part. But a base 4-cylinder Macan these days is priced like a Cayenne S from less than 10 years ago. And you could buy a decent Cayman for $50k.
I wanted to call BS on this, but you are VERY right.
2015 911 carrera S MSRP = $87k
2025/2026 911 carrera S MSRP = ~$156k
$87k of 2015 money = ~$119k today
Ha thanks. I also just went the the Porsche configurator to make sure I wasn’t making shit up and specified a reasonably nice Macan base and it was $88k. Crazy.
It doesn’t help that used 911’s hold so much of their value. At least compared to other luxury vehicles.
The dream just flew out the window.
I’m 57 and squarely in the GenX demographic. WHO?
Surely you remember the Pixies right? Kim Deal, the bassist? She had her own band with her sister called The Breeders. They had a big radio hit with the song “Cannonball” but they definitely rock.
I keep looking at 911Ts. I’m about to retire and this would be my forever car. The price is just too high for what you get, unfortunately. You’re not getting out the door for under $150k (which is $200k CDN). The Cayman GTS is now gone and while it was a bit cheaper, was still expensive for what you got.
Porsche needs to look at their value proposition. They might make lots of money off GT3s but they are never going to hit 400k units at those prices.
Porsche prices keep surprising me.
In my mind it wasn’t that long ago that $50k got you into a new Cayman and $80k got you into a 911. $120k got you a NICE 911.
So every time I go look on their website I think “oh, a base 911 must be, like, $95k now”. Not 135,000 dollars.
Porsche is kinda screwed. Their SUVs used to print money because they were considered a league of their own, a sign that you made it a step above the BMWs and Mercs and Audis of the world. However, in China there’s now 2-3 new, trendier ways to show that wealth (Li Auto, Aito, Nio, even Xiaomi soon) in a more desirable package for that audience (comfortable ride, 3-row with comfy 2nd row seating, high tech integration in the infotainment system, competent semi-autonomous driving), and while those badges are new, they’re becoming old enough now to be recognizable to their wealthy neighbors.
This has caused Chinese sales, which used to be Porsche’s biggest market at 30% of its global sales 5 years ago, to drop to 15% now with a larger portion of the 50%+ sales drop coming from the money printing SUVs. It’s also quite unlikely that they’ll get those sales back unless Chinese consumers car buying preferences change towards sportier cars, which won’t happen fast. This means Porsche will just simply have less money to play with to make fun cars from now on, long term.
Well, affordability is the name of the game now right? Therefore, new 914.
This. Miata is the answer to everything.
Something small, minimalist, and focused on fun. I’m thinking Lotus Elise. Low power, naturally aspirated, two seater. Porsche has lost touch with core values. The 911 is a huge GT car these days.
It isn’t that hard. Build what you can on set shifts. If that exceeds demands cut a shift. If it falls short don’t change until demand falls enough to require a new shift. Supply falls short of demand price goes up. Demand exceeds supply price goes down and you have the cost of an extra shift. Never pay OT.
What should the next new Porsche be?
A Porschefied VW ID Buzz.
The next Porsche need to be a relatively inexpensive (relative to Porsche prices) generational successor to the 914. It out in ICE, Hybrid, Erev and maybe even a full on EV. Im thinking upscale Miata money. Fuchs wheels, and I want mine in orange
i don’t see how offering amnesty admits that things are “very bad. one thing that has been a hard lesson for me to learn is NEVER COMPLAIN or SNITCH. you think you are helping but the president will just target you and single you out.
For volume and money, a hybrid Macan.
For image and cred, a stripped-down lightweight manual Cayman.
They aren’t going to beat the Chinese at electric and people don’t want an electric Porsche. Go after the people they scared away. Make something reasonable with decent specs and very mechanical with little tech. They can still probably sell the gt.. whatevers but the need volume. Even a little turbo 4 in a relatively light weight car like an elise. An off the shelf vag engine is fine. The luxury SUV is how they saved their self before so go back to that some kind of strange relatively bulletproof vehicle.
I constantly see social media drooling over anything Safari’d and Porsche is uniquely placed what with them Dakar wins. They made a timid small run, and the results were predictably inconclusive, but brother give the world a Porsche-built Brataroo and watch the cash run towards you.
But Porsche has been for years a victim of its own success: fussy, aloof, and taking itself way too seriously. Kinda like the Kardashians. I deeply respect what they were but I dislike what they became.
Use the Macan and make it shorter in height. Sedan, coupe, wagon.
TBQ: The next Porsche should be an MR2 with a VR6.
The company got hit by the electrification pendulum first when they invested in making the 718 all-electric and then again when that idea soured so badly that they’re deciding whether to try selling them with engines and/or scrap the model entirely. That means an entry-level mid-engine sports car is not just on the table but top of mind.
Maybe putting an engine in the 718 EV is the answer. Maybe it’s a whole new car. Either way, with base Caymans starting at $75,400, they’ve gone beyond the average price of a new car and might well be looking at whether they can get the big numbers they want by occupying more of the market with a less expensive product.
The Boxster/Cayman coupe/cabrio formula needs two (well, 1.5) sets of tooling, so make it a targa to start and consider hardtop or speedster versions if the demand is there and pencils out.
It should be small but not too small, especially in terms of wheelbase. Porsche buyers won’t abide the driving dynamics that inspire MR2 memes. That might favor ICE-ifying the 718 EV but the thing looks big. Maybe keep that wheelbase but reduce overhang.
Four-banger 718s were poorly received, and a flat engine doesn’t fit well in a small mid-engine car, so Porsche could use its V6… although the compact, sonorous, and extinct VR6 would be ideal.
The bigger problem is the gearbox. The powertrain might have to be transversely mounted and there might not be suitable transmissions in the parts bin, especially manual ones. Being saddled with a slush box hurt the Alfa 4C but wasn’t a problem for the Alpine A110, which is probably the closest competitor for this proposal.
So yeah. Renault/Nissan won’t give us an A110, so Porsche should.
What’s the eext Porsche huh… Depends on how cynical I’m feeling I guess:
Used to want one, but anymore it’s just another lifestyle brand for people that I don’t want to look like.
Porsche needs a full size truck, it’s a huge gap in their lineup.
Rebadged and hotted-up VW Amarok W600 should work.
The next Porsche needs to be a reincarnation of the 914, small, light, simple, ICE-powered, with a manual transmission, that mere mortals can afford. Take whatever small FWD VW powertrain still exists with a stick and stick it in the back Fiat X1/9 or Fiero style, then work some Porsche magic on the thing.
Won’t happen, but one can dream.
A simple lightweight something. Concentrate on how it feels.
I have driven both 914s and Boxsters, was offered my choice, and took a 914. They don’t feel remotely similar.
Design a structure that can be powertrain agnostic. Do the 60 pages of options thing if you want but get the spirit of the original Speedster, and have extreme stripper version. Can windows be optimal? Can infotainment and AC be optional?
Very, very much agree. though personally, I want A/C – I live in Florida! I don’t get the point of EV sportscars. EVs universally have very little feel to them, and even less character other than FAST.
I really much prefer slow cars that feel fast, but there is no chance that any new Porsche isn’t going to be at least a bit silly fast.
Damn I should have read this before posting as I said exactly the same thing
That’s harsh, ‘there’s a money attached in Washington’. But true.
Well, well, well, well, well. Looks like funding the election of Team We Hate Governance for *years* has filled the administrative state with slavering idiots with no idea how to govern or write policy. Who could have predicted this outcome?
Seems like one of the few saving graces of Trump 2.0 is that they’re all incompetent opportunists who came up politically in a movement where there’s absolutely zero expectation to actually know how to actually govern
What should the next new Porsche be?
An inexpensive (for Porsche) Boxter / Cayman with an NA flat 6 engine – the same sportscar architecture that saved them from bankruptcy the last time they were near death. Keep the weight (and the tech) low and they’ll be the only entry in that segment of the market (go just upscale of the GR86 (with a better engine and some actual sound deadening) which is no longer available in Europe anyway).
Maybe Porsche needs to take a page out of the Spaceballs playbook… It’s all about merchandising. Porsche – The Breakfast Cereal, Porsche – The Toilet Paper, you get the idea. Volume of non-automobile items will be through the roof!
They are already pretty close to that.
I didn’t see no toilet paper or breakfast cereal… They’re doing it all wrong.
I normally don’t do FTFY posts, but…
Maybe Porsche needs to take a page out of the
SpaceballsFerrari / Harley-Davidson playbookDidn’t Ferrari beat them on that idea? And looks like they’re trying hard to catch up, meanwhile I am still waiting for my fancy AMC fountain pen delivered in an alligator leather case.
I’d settle for a decent 1/25-scale plastic promo of a Hornet Sportabout/Concord wagon/Eagle wagon.
It should be a stripped down “xx” anniversary edition, maybe a 30 year or so? Things were “safe” in that period, but still relatively simple.
Build a simple throwback. Throw in as many low-tech improvements as you can from the last 30 years, with a focus on simplicity. While I’d love to say sell it to us reasonably, I bet they could charge insane amounts and it would sell out.