718 ways Porsche fixed its India business

German automobile company Porsche is known around the world for its reliable sports cars. In India, however, the company has had a rough ride. But the signs are Porsche India may have turned the corner, thanks to two mid-sized sports cars it launched six months ago.

Porsche's 718s, the Cayman and the Boxster—both powered by a 2-litre engine, and costing between Rs 85 lakh and Rs 89 lakh (ex-showroom Delhi)—have raced to contribute nearly 15% of the company's sales in India.

If the trend continues, Porsche will soon cross the 563-unit mark—its best ever annual sales recorded in 2013. For context, Porsche sold 401 cars in 2016. This turnaround comes right after Porsche dumped its master importer, Ashish Chordia, in 2012, after an ugly spat, got rid of a controversial MD, and finally got its portfolio right.

Among car enthusiasts Porsche is known for its drive-to-work sports cars—fast cars that do not suffer from reliability and practicality issues like other high-performance cars. It is this German trait that lets Porsche stand apart even if it doesn't tug an aficionado's heartstrings like Italian brands Ferrari and Lamborghini.

“The thing about Porsche is even if you don't start the car for two months you won't see error messages pop up like in other brands, which makes it reliable, popular and in demand," says Jatin Ahuja, founder of Big Boy Toyz, a Gurugram-based dealer of used exotic automobiles.

Yet, Porsche had its problems in India. For instance, the Macan, a compact SUV, was priced at around Rs 1.1 crore, while its full-sized diesel SUV, the Cayenne—the best selling model in India—was priced Rs 7 lakh cheaper. In 2016, when Porsche first launched the 718 Boxster and Cayman, with larger, more powerful engines, they were priced above Rs 1 crore—within striking distance of the flagship 911, which starts at around Rs 1.3 crore.

"As a result we had an identity crisis that confused what the volume builders were, and what the flagship product is," says Porsche India's managing director, Pavan Shetty , who joined the company in August 2015.

That has now been sorted. One of the reasons why Porsche is able to price the new smaller-engine 718s so attractively is the lower import duty of 60% as against the 100% levied on higher-powered cars.

But price isn’t the only factor that would attract a buyer to the model, says Naresh Lakhanpal, former president of Patni Computers USA, who lives in Dallas, Texas. Lakhanpal, a longtime Porsche loyalist, bought a 911 Carrera around 10 years ago, before he switched to a faster 911 Turbo. He then added a mid-engined Cayman to his fleet. Next up was the 911 Turbo S which that he describes as "a refined monster capable of almost anything". Later, Lakhanpal bought a Macan S, the "house car”. After five Porsches, Lakhanpal says the 718s, the Cayman and the Boxster, are important for buyers who want to either trade down—like in his case—or up.

“They all have similar DNA, which is great all-leather interiors, sporty tuning, handling, ride, and performance,” he says. “But they also all drive very differently, which the aficionado will notice."

Ahuja says Porsche can sell more units in India if the company markets it better. “The 718 Boxster and Cayman are fantastically priced, but it needs to be better communicated to the market, and if it [Porsche] does that, it will eat up at least 50% of the market share in that segment," says Ahuja.

The upbeat mood is a sea change from the past, when Porsche India's reputation took a beating due to the alleged wrongdoing by importer Ashish Chordia, who is presently involved in a lawsuit against Porsche AG. Chordia sued first.

Also Read: Chordia Vs. Porsche. No Holds barred

The legal trouble once even stopped the CEO of Porsche worldwide from visiting India for fear of being arrested. And before that, Anil Reddi, India MD Shetty’s predecessor, had rubbed various stakeholders and high-profile owners the wrong way. Reddi quit in July 2015.

But with Porsche replacing its personnel and most of its dealer network, and with the launch of the new 718s the company seems to have got its act right.