Indian Autos blog

Saturday, April 19, 2008

Porsche's plan for India

NDTV recently Interviewed Porsche's Managing Director for Middle East and Africa, Deesch Papke and asked him everything from the idea behind the new GTS to the company's future plans in India.

NDTV: What do you hope to achieve with Porsche Cayenne GTS?

Deesch Papke: Porsche Cayenne GTS is the result of an opportunity that we saw within our product range, which is to fit a new product nicely between Porsche Cayenne S and the Porsche Cayenne Turbo S. We took the standard V8 engine in the Porsche Cayenne S and changed the dynamics of car to make it similar to turbo. The engine in Cayenne GTS is slightly more powerful with different suspension setting, making it a more sporty and dynamic car.

NDTV: Cayenne is already popular among customers witnessing great growth in terms of sales. So did you really need a new variant from sales point of view?

Deesch Papke: We have always got to be looking for opportunities where we can give our customers something even more enjoyable and something more dynamic. Yes, we are blessed with the fact that we have strong demand at the moment especially in the middle eastern region but that won’t stop up for always looking for something that gives our customers more unique and sporty cars.

NDTV: Do you expect a good demand for Porsche Cayenne GTS in India too?

Deesch Papke: We have had very interesting introduction into the Indian market. We started our operations in India three years ago and we now understand the challenges in the Indian market. As the infrastructure grows we’ll see the sport cars starting to increase their market but for the time being Cayenne will have the lion’s share in the Indian market.

NDTV: What percentage of your sales of Cayenne does the Indian market account for?

Deesch Papke: At the moment it is 85 per cent and within the product range itself you have a very unique split. By offering the Cayenne GTS we are providing the discerning customer something sportier. I think it will be very good for the market.

NDTV: In India do you see a change in image for the brand setting in? Do you think people will recognize the capability of the Cayenne range beyond a status symbol?

Deesch Papke: You need to afford people the opportunity to enter the brand. Our brand is a very aspirational brand and we’re very lucky in that regard. But you can’t only opt for the top of the range always so you give customer the opportunity to enter. If you do it well and deliver the services on demand then you can win their confidence.

NDTV: Give us a sense of the markets (especially Middle East) that you actually operate in?

Deesch Papke: It is a diverse and energetic region and I would be arrogant to say that I know the region well. We have South Africa, Kenya, Angola, Nigeria, Egypt, Lebanon, GCC Dubai and India. Ten years from now I think India will be a huge market. Between today and then we have a large amount of work to do and we are very positive about India in a long term.

NDTV: Do you still see a big potential in the Indian market knowing that large segment of Indian population is not going to afford such luxury cars?

Deesch Papke: If you look at the statistics then the number of dollar millionaires that are being generated every month is still high in India.

NDTV: For years we have seen the constant comparison between India and China. Do you see that moving away from that where each one is separate entity?

Deesch Papke: Unfairly I think not, because due to similar population size and unknown quantities there will always be parallels between China and India for term of reference.

NDTV: Within Porsche Middle East which are the vehicles that do well and what kind of customer profiles that you are looking for?

Deesch Papke: Before the introduction of Cayenne we had moderate performances in the region with only 400 cars. But the introduction of Cayenne proved to be of immense success across the region. The only market where we sell more sports car than Cayenne in the entire region is South Africa. We started off selling 85 per cent of Cayenne across the region and last year it was 65 per cent, which is very good for us because the brand has been institutionalize with the sports car growth. Our forecast for future is that we’ll continue to have very strong demand for Cayenne.

NDTV: Infrastructure is the key problem in India and we’ve seen things happening but is that growth just too slow?

Deesch Papke: One’s initial reaction is that it’s too slow. In a densely populated city like Mumbai you can’t have freeways maybe there got be fliers. We were in Bangalore at the end of last year and there you can see a lot of things are happening.

NDTV: A lot of critics will always argue that there is always been a big pent-up demand for these cars in India and it starts getting met, it is going slowly start to fizzle out. Do you agree with that?

Deesch Papke: No I think what will happen is, as the economy produces more and more distribution of wealth, the pent-up demand will continue.

NDTV: You have limited number of cars that gets produced out of Germany every year. Within your region what are the number and do you see it changing?

Deesch Papke: We have a system where the importer calls for cars, which is called demand and then we manage that in a way as close as possible to meeting that actual demand. Last year we sold 85 cars and this year we believe it is going to double. Our target in this region this year is 6,000 cars and out of those cars we can manage to meet the demand of cars.

NDTV: Do you also see the demand growing from India?

Deesch Papke: At the moment the base is relatively low. When we moved in, the demand was around 200 cars, but now it is growing. We are overcoming the barriers to enter the market by amalgamating our cars, which is a costly and timely process.

NDTV: Do you expect the government to deliver on taxation and duty structure as promised in the Union Budget?

Deesch Papke: You must know that these are very strong income generators for the government and it will take time.

NDTV: Can you throw more light on the Volkswagon front?

Deesch Papke: As you know Porsche’s current holdings in Volkswagen is 31 per cent. Porsche wants to bring it up over 50 per cent and the board has approved that it could be done. It will benefit us at the central level while protecting Volkswagon from hostile takeovers and providing us economies of scale.

NDTV: In the future do you see more products being jointly developed by Volkswagon?

Deesch Papke: The introduction of Porsche hybrid system was jointly developed with Volkswagen. Wherever it is possible and wherever it makes sense, we’ll continue to find engineering and development synergies that is good for all brands while ensuring that brands stay completely autonomous.

NDTV: What is your expectation of Porsche Panamera?

Deesch Papke: We are entering a completely new segment and we have enormous expectations out of it. The Porsche Panamera, which is a four-door, four-seat sedan, still in concept stages, will meet the demand of Indian customers perfectly. It will be powered by a modified version of the 4.5 L V-8 found in the Cayenne, equipped with the FSI system as used by Volkswagen.

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