In the latter half of 2012, Porsche AG may roll out its new 911 Carrera and Boxster convertibles in the domestic market. The company launched the new version of 911 Carrera model with a rear mounted engine in the global arena in January 2012, while the new edition of the Boxster with the engine located in the middle was introduced in March.
These models will be imported and sold by the German auto major via Volkswagen Group Sales India as per its international plans. Thus, VW will take over the luxury car manufacturer's sales from Precision Cars India Pvt. Ltd., which formed the alliance with Porsche in 2007. On the other hand, A separate subsidiary of the company called Porsche India will work towards enhancing the brand visibility as well as growth rate of Porsche AG.
Porsche sold as many as 312 vehicles in India in the year 2011, which was significantly higher than its sales volumes of 131 units in preceding year. The luxury car segment of the domestic auto industry is very small presently, with sales of just 15,000 vehicle in 2011. However, it is estimated that it will account for the sales of 1.5 lac units by the year 2020, a tenfold increase in volumes.
According to Rakesh Batra, Partner and National Leader, Automotive Practice, Ernst & Young Pvt. Ltd., such excellent growth prospects have lured many Original Equipment Manufacturers (OEMs) to the country. He also said that the key growth drivers for the projected hike in volumes will be the growth in expendable income and the ready availability of a vast line-up, from entry level premium cars to top-of-the-line sports vehicles.
Anil Reddi, Director, Porsche India, commented, “We are currently evaluating our network strategy and it is too early to disclose any volume targets but I am positive that new developments will foster our continuous sales growth.” Responding to a query about Porsche's dealership network in the country, he said that it is evaluating the status of the existing dealer network and is mulling over the opportunities to increase its reach in India in the coming time.
Pragya Bansal, Auto Industry Analyst, Fitch Ratings India, commented that Porsche AG's alliance with compatriot auto maker Volkswagen (VW) for importing and selling cars in India is part of their plans to merge the two companies. Despite hitting a few legal roadblocks, this merger still seems to be on track as VW presently has acquired close to 50 per cent in Porsche's auto division. It is said that the former is extremely enthusiastic about taking over the latter's operations. On this, Reddi said, “Currently, we are in a business transition phase and will assess at the overall availability of Porsche vehicles soon.”
Notably, an alliance with Volkswagen will allow Porsche to make further inroads into the domestic market, since the former already sells luxury cars through its Audi brand using its exclusive sales and service network. In India, the luxury segment is expected to increase at a faster rate as compared to the whole passenger vehicle sector over the course of the next few years. Thus, other prominent premium car makers that had refrained from venturing into the country till now are heading here. Therefore, the arrival of international rivals of Lexus, Infinity and Acura, among others will only make Porsche's task tougher.
