Porsche: The Crisis of 1992 Essay Example

Porsche is a German car company that has been 100% owned by Porsche Automobil Holding SE since 2007. As of December 7, 2009, 49.9% of the company's shares belong to Volkswagen AG. The company specializes in the production of passenger sports and racing cars.

What challenges was Porsche facing in 1992?

When Dr Wendelin Wiedeking was assigned his new job, the position could not be more challenging:

• Porsche’s unit sales had dropped from a high 60 000 a few years earlier to less than 15 000 in 1992
• Declining financial results (negative net income)
• Automotive industry in crisis
• Difficult competitive environment especially with the Japanese luxury automakers
• Rumors of takeover by another car manufacturer
• Departure of many of Po
  ...

  rsche’s key directors (R&D, Marketing, Production)

  What were the key drivers that put Porsche into this situation?

  Internal factors .A production model expensive and not adapted: too many model lines and different versions resulting in Porsche cars travelling all across Germany. Globally, a traditional approach to production, using high tech and sophisticated processes whereas the whole industry was changing its process.

  Major problem of quality: rarely was a finished vehicles without defects, High level of stocks. Too many suppliers (about 1000 in 1992).  The company was sustained on a single model: the Porsche 911.

  No real new model in the pipeline. Other models barely profitable for Porsche (924) and mostly overpriced or at least not perceived by customer as worth the price. A former top management (CEO) too focused on engineering and not enough on R&D and production

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