Porsche to Keep Producing Cars in Germany Regardless Of Euro Fate

   By Gilles Castonguay 
 

MONTE CARLO--Porsche AG sales chief Bernhard Maier said Thursday the German sportscar maker will keep building its cars in its home country regardless of what happens to the euro.

"Our customers like it that their Porsche is made in Germany, it's reassuring to them," Mr. Maier told reporters on the sidelines of a congress hosted by Automotive News Europe, an industry publication.

He said Porsche would have to defend the image of its brand.

The Stuttgart-based firm has a large exposure to swings of the euro against other major currencies as it produces all its cars in Germany, but a large chunk of production is being exported to such destinations as the U.S. and China.

A potential collapse of the euro could trigger Germany's return to the deutsche mark, which would cause major headaches for many German industrial firms as economists expect the mark to quickly appreciate against other currencies, making exports significantly less profitable.

Mr. Maier said Porsche hadn't made any preparations for an eventual demise of the euro, an outcome that has risen in light of investor concerns about Greece's possible withdrawal from the euro zone and the impact this could have on other countries that use the common currency.

"We have not prepared ourselves, but we are watching it carefully," he said after giving a presentation at the congress.

Should Germany be forced to bring back the mark, Mr. Maier said Porsche would look to cut costs by shifting production to other areas in the country and use its relationship with Volkswagen AG (VOW.XE) to share costs.

Volkswagen, Europe's largest auto maker by sales volume, owns a 49.9% stake in the sportscar maker and wants to take over the remaining 50.1% from its affiliate's umbrella firm, Porsche Automobil Holding SE (PAH3.XE), as soon as possible to reap economies of scale through closer cooperation.

Mr. Maier reiterated Porsche expects full-year car sales to increase compared with 2011 despite swirling economic concerns in Europe and it sticks to its long-term target of boosting annual sales volume to 200,000 vehicles. In 2011, Porsche sold around 118,000 vehicles.

"Sales are looking pretty good," he said. "It is not the entire world that is in deep trouble. It is a Europe issue."

Porsche had seen sales grow in Germany and other parts of Europe, as well as North America and Asia, he said.

Porsche is working to broaden its product portfolio to comprise six or seven model lines, but not more, he said. It has four model lines with the Boxster/Cayman, the Cayenne sports utility vehicle, the four-door Panamera coupe and the flagship 911 sportscar.

Porsche will launch a small SUV next year based on the Cayenne, but for the time being it has ditched the idea of developing a model below the current Boxster roadster.

-Christoph Rauwald in Frankfurt contributed to this article.

Write to Gilles Castonguay at [e-mail]