Porsche's outsourcing strategy

[haigha]

I didn't know that the Cayman and Boxster were built in Finland...

"Outsourcing to less-expensive places like India, China, Taiwan and Eastern Europe became routine for many American and Western European companies over the past decade. But what’s Porsche doing in Finland?"

http://www.nytimes.com/2009/04/04/bu...orsche.html?em

[JCL]

I knew Valmet built a couple of Porsche models, from when I looked at a Boxster S years ago. Didn't know Valmet had now built over a million vehicles. Looks like they are going to build the Fisker as well.

I toured a Valmet factory in Finland some years ago, but it was manufacturing forestry machines, not cars. I just remember that it was a long ways north, cold, and that there was herring with every meal. Interesting place though.

[motordavid]

Yes, pretty good move on PCar's part, too...when demand falls off, they just move the
outsourced production back into the main Stuttgart plant.
It will be a tough row to hoe for very low volume cars, like PCars, over the next yearish.
Good link, Haigha.
BR,mD

[E61Silver]

Interesting story PC, seems to be one of the few car makers positioned for the long term.

They might be a stock buy?

[blondboinsd]

Interesting. I know the Cayenne is made in Slovakia because it's the same factory that makes the VW model. I would consider it the same as BMW making it their 3 Series models in South Africa. No Big Deal as long as the quality is present. My Jetta is made in Mexico and has fantastic build quality. It's all in quality control

[JCL]

Originally Posted by blondboinsd

Interesting. I know the Cayenne is made in Slovakia because it's the same factory that makes the VW model. I would consider it the same as BMW making it their 3 Series models in South Africa. No Big Deal as long as the quality is present. My Jetta is made in Mexico and has fantastic build quality. It's all in quality control

I think the difference is that BMW owns the factory in South Africa, and VW owns their factories in Slovakia and Mexico. Outsourcing to an independent assembly company is a whole further step. It would be more like Magna assembling the X3 in years past.

While I agree that the quality control is important, I think that the economic angle that MD references is key; as demand fluctuates it is the outsource suppliers that will be hit hard first, as production is pulled back in-house. Then it will be case of whether the manufacturer can maintain the quality when they haven't been building the vehicles themselves up to that point.

[FSETH]

Originally Posted by JCL

Then it will be case of whether the manufacturer can maintain the quality when they haven't been building the vehicles themselves up to that point.

Wouldn't it be ironic if Porsche couldn't build their cars as well as someone else? Could you imagine people actually buying certain production dates down the road because Porsche DIDN"T build the car?

[haigha]

Originally Posted by FSETH

Wouldn't it be ironic if Porsche couldn't build their cars as well as someone else? Could you imagine people actually buying certain production dates down the road because Porsche DIDN"T build the car?

The article suggests that might be the case:

Rumors abound in the industry that Valmet’s quality sometimes outstripped what Porsche has managed back in Stuttgart, a charge Mr. Korhonen does not deny.

“Officially, we are allowed to be only as good as Porsche,” he said with a smile. “What matters is the customer.”


The Boxster has always had good ratings in CR's reliability reports.

[JCL]

Originally Posted by FSETH

Wouldn't it be ironic if Porsche couldn't build their cars as well as someone else? Could you imagine people actually buying certain production dates down the road because Porsche DIDN"T build the car?

Same story as the X3. Getting one built by Magna is a bonus, given the assembly quality. One can argue about whether they like the X3 design, but of five BMWs I've purchased, the X3 had the least number of issues relating to build quality.