I have 3 questions.. about the global focus on production location so important for Porsche??... What are the

Question

1.Why is a global focus on production locations so important for Porsche?
2.What are the benefits of having Volkswagen as a partner in producing the Porsche Cayenne?
3.Are there any risks for Porsche having 50% of its market in North America?

Answer 1

1 - The same reasons any business will focus on specific markets or specific segments: to maximize their return and to work in areas where they have shown to be successful in the past. And as an add-on to the second part, to leverage what success they have in that area to move into related market space.

2 - Cost. By developing a platform that would be used by VW, Porsche paid less to develop the Cayenne than it would otherwise. It is also likely that there are many shared parts between the two that are sourced from third party vendors, and the increased volume VW would bring would bring down the costs of these items, and also potentially make items available from more IEM vendors to help address future cost and/or availability issues.

3 - In the event of a collapse of North American sales, the company would take a huge hit. The US market in particular has always been key to Porsche, and if you look at periods where the company has been in trouble it has always mirrored downturns in US purchases. This remains a risk, though one of the key reasons stated in the Cayenne introduction was add the needed variety to their lineup in order to carry good sales through similar downturns if they were to come again (ie - sales of vehicles that can be justified as "family cars," no matter the cost, tend to be flatter than sports cars which would be viewed as luxury items).