Challenge for Porsche China’s New Boss.doc

1、1Challenge for Porsche Chinas New BossOn June 8， Porsche China announced the news of “executive change”： Deesch Papke replaced Helmut Broeker as the CEO of Porsche China. It is known that Porsches headquarters in Germany has already held the will of changing chief executives of its important regiona

2、l markets. The other 7 regional CEOs， who control Porsches business in Europe， Africa， Americas， Asia and Australia are going to be replaced in the second half of this year. Two days before the change of Porsche Chinas CEO， the company announced the sales volume of 150 thousand units in May， up 13%

3、from a year before. But in China， the sales only grew by 5.9%， distorting Chinas role as the second largest market for Porsche. The slower growth is common for every luxury automaker in China. What business performance could Porsche report after changing the new boss？ Complete Shake-up Papke and Bro

4、eker swapped their roles. When Papke took over 2Porsches business in China， Broeker replaced him as the director of “overseas and emerg-ing markets of Porsche”. According to Porsches official announcement， this is a normal executive change and Porsche will continue to devote to the development of Ch

5、inese market. Papke， 51， once took important positions in Volvo， Land Rover and Mercedes Benz. It is believed that Papkes rich experiences in the management of luxury cars and his understanding of emerging markets are why he was appointed CEO of Porsche China. Looking back at the history of Porsches

6、 development in China. The previous glories of Porsche in China were gained under Broekers leadership. He took over the Chinese market in 2007. In his 6-year tenture， Porsches annual sales in China （Hong Kong and Macau included） increased from 4，856 units to 31，205 units. The six-fold increase pushe

7、d China to the position as the second largest market for Porsche. Therefore， replacing Broeker was more than “ordinary executive change”. An insider from Porsche said that this is a part of global executive exchange， which is to lay a foundation for its 2018 strategy. For this， Bernhard Maier， a mem

8、ber of directorate of 3Porsche said： “the swap of senior executives is good for the exchange and share of experiences. This can provide sustainable and reliable support for Porsches 2018 strategy， and can complement with each department.” The Crucial Year The “2018 strategy” requires Porsche to incr

9、ease the returns rate of sales to at least 15% to keep its role as the most profitable automaker in the world. The Chinese market is an important part of this plan. Broeker once said： “China has been our second largest market for long. We expect it to beat the United States as our largest market in

10、2014.” A group of figures could reveal how important China is for Porsche. In 2012， one third of Porsche Panamera were bought by Chinese. With the progress of“2018 strategy”， Porsche entered its crucial year in China. According to the “2018 strategy”， Porsche is going to launch four new models in fi

11、ve years and increase the total sales in the world to around 200 thousand units. Matthias Mueller， board chairman of Porsche Global， said that the new models include compact SUV Macan， 918 Spyder and two new members. An insider from Porsche China said that the new Macan will get into China at the en

12、d of this year or the start of 4next year. It will target BMW X3 and Land Rovers Evoque. Meanwhile， Porsche is planning to expand its sales channels for the sake of this goal. Mueller said that Porsche will invest about 200 million euro every year to expand the sales network and is going to increase

13、 the number of dealers to 1，000 units before 2018. 10% of them will be located in China. Presently， there are 48 dealers of Porsche in China. It is known that Porsche China has already begun to recruit more dealers. Broeker said that 30 additional dealers will be added by 2015 and the “preparation h

14、as almost been done”. Outlook to Be Tested But Broeker could not see that day. The slower growth of Porsche in China rang an alarm for the headquarters of Porsche. In comparison， the German luxury automaker sold 3，927 units in May in the United States， 37.7% more than a year before. In 2012， the U.S

15、. market lost to China in terms of sales of Porsche for several months though the whole years sales was still higher. Porsche was joined with other luxury automakers. The statistical data shows that the market of luxury cars in China only increased by 8.34% in the first quarter of 2013， while 40% in

16、crease occurred in Q1， 2012. The sales of luxury cars 5dropped 80% in the first quarter， and the dealers had to deal with the increasing inventory stress. Whats worse is about the possible additional taxation over luxury car consumption. Though the news has not been confirmed， it is certain that add

17、itional tax， once implemented， will bring a great disaster to the Chinese luxury market. Papke seems to be ready for such a challenge. “I believe that Porsche will have new strategies to tackle the expansion in China. We have clear goals about the Chinese. We need to focus on these goals and work ha

18、rd for them with great efforts. We are going to launch more new models in China， carefully design promotional campaigns and improve the individualized services.” In addition， Porsche is going to adopt model- and platform-oriented production methods to produce cars， so as to reduce the cost and improve the output. The upgraded competition is coming and the performance of Porsche China under the leadership of new boss is worthy of attention.