Porsche Spins Its Wheels… Into Trouble?

Porsche got reasonable coverage of its recent announcement that it will cut its Canadian prices by 10 per cent over last year to compensate for the strong Canadian dollar.

“We cannot ignore our customers and dealers in Canada who can look to the U.S. and recognize a substantial price difference,” said Peter Schwarzenbauer, president and CEO of Porsche. “We listened to the market and did what is best for our customers in Canada.”

Update: Interestingly, the announcement doesn’t seem to be anywhere on Porsche’s website.

At first glance this seems to be good news (at least according to the traditional media). However, look under the skin and you’ll see this is more about good PR than good customer relations.

As numerous commenters on the Globe and Mail’s story noted, Canadian prices were 30 per cent higher than those in the US before this announcement. The 10 per cent drop therefore still leaves prices 20 per cent higher north of the border.

The Toronto Star confirms this, noting the Boxster S is still about $15,000 cheaper down south, at $55,700 (US) compared to $70,200 (CDN).

Porsche is in danger of alienating its customers here. As a high-end car manufacturer, its reputation is central to its brand.

I don’t think any reasonable person would have expected a 30 per cent cut – given the state of the automotive industry in North America, what manufacturer could afford that?

However, by trying to position its price cut as a response to the parity between the Canadian-US currencies, Porsche may have spun itself into trouble.

Sidenote: In related news, the Toronto Star reported today that several automakers are being hit by a class action lawsuit about their US/Canada price disparities.

Dave Fleet
EVP Digital at Edelman. Husband and dad of two. Cycling nut; bookworm; videogamer; Britnadian. Opinions are mine, not my employer's.