Porsche sales and profits booming in Australia
Porsche sales and profits in Australia are rising fast with the Porsche SUV's a solid contributor. Directors say the rest of 2016 should be solid but they have niggling concerns about a slowdown in broader consumer confidence in late 2016.
by Simon Evans
A new breed of affluent family buyer pursuing the Porsche version of a "Toorak tractor" has helped sales and profits accelerate at luxury car group Porsche Cars Australia, although directors of the local arm have some niggling concerns about a potential slowdown that could dampen consumer sentiment late in 2016.
Record sales of Porsche vehicles in Australia have flowed through to the bottomline profits of the corporate entity that oversees the imports, sales and servicing of the luxury brand. Total revenues climbed 46 per cent to $623.5 million in calendar 2015.
Strong sales of the Cayenne and Macan sports-utility vehicle models drove profit after tax up 15.3 per cent to $21.7 million.
Porsche purists loyal to the traditional sports car segment on which the German firm has built its brand since it first arrived in Australia in 1951 are now outnumbered by those buying the lower-priced Porsche SUVs.
SUVs now represent more than one third of all new vehicles sold in Australia as buyers embrace sitting higher in vehicles with more cabin space. There are 65 different brands of SUV on the market.
The financial statements for Porsche Cars Australia were lodged last week with the Australian Securities and Investments Commission for the 12 months ended December 31, 2015 and give a clear insight into the strong spending on luxury cars at the upper end of the market.
This comes at a time when Australia is making the transition to a more services-based economy after the disappearance of the mining boom causes headaches for policy makers such as the Reserve Bank of Australia, which is wrestling with low inflation levels and sluggish economic growth.
Porsche won't comment specifically on its financial performance so far for 2016, but it is headed for new records with sales across its portfolio up 27 per cent to 2630 vehicles for the six months ended June 30, 2016.
There were 813 Porsche Cayenne SUVs sold in the first six months of 2016, while there were 1279 Porsche Macan models, known in the car industry as a "baby Cayenne", sold across the 14 dealers operating in Australia. The new Porsche Boxter made a strong start with 47 sold in June, according to official industry data from the Federal Chamber of Automotive Industries, while 38 Porsche 911s were sold.
Porsche Australia's operations are run by managing director Sam Curtis, who took the top job in February 2014. Mr Curtis and his fellow directors said a refreshed product range should ensure another strong sales year.
"However, economic indicators show a slowing in the retail sector which could dampen consumer sentiment in the later part of 2016," the directors said.
Sales of luxury vehicles are strong across the market as the Australian car manufacturing sector prepares to wind down, with Ford set to shut down its car making and engine plant operations in Victoria in October this year. Both Holden and Toyota are scheduled to close down their car assembly lines in late 2017, meaning Australia will no longer have a car manufacturing presence.
The latest industry-wide figures from the Federal Chamber of Automotive Industries for the six months ended June 30 for the entire new vehicle market in Australia show that sales are up 3.4 per cent on the same time last year, and are also headed for a new record, fuelled by fierce competition and record low interest rates.