Mercedes have a channel designed for owners of their older cars. Now Porsche is following suit.
But Bristol were there long before, since most of their business revolved around re-selling their cars and keeping them on the road. In the case of Mercedes and Porsche the turn-over will be rather bigger than Bristol’s cottage industry. Is this the start of a trend?
Porsche have opened a centre in Gelderland, Holland to cater for the sales, service and restoration of their discontinued models. This is what they are offering (caution: chunk of cut-and-pasted text): “More than 70 per cent of the vehicles ever produced by Porsche are still running today. To ensure that these classic cars receive optimum support and overhaul facilities, Porsche is establishing an international dealer and service network with some 100 centres to reach completion by 2018. This mainly involves Porsche centres which will provide support for sports cars of earlier eras in addition to the current models and will be certified as Porsche Classic Partners.
Porsche customers and potential customers can expect the complete range of Porsche Classic services from the Partners. These services will not only include the supply of some 52,000 original spare parts, complete and partial overhauls but also repair and maintenance work and the sale of classic cars. The Porsche Classic Partners will be setting up a separate area for this purpose with classic vehicles on display and current spare parts together with technical literature and information.”
Let’s say the future for new cars doesn’t look as rosy as it once might. Maybe there is money to be made in not only selling new cars but keeping them running indefinitely. And whereas at one time manufacturers were content to let others supply accessories, now this business in firmly under the show-room roof. Why else are roof-rails now so model specific?
One way to view this step by Mercedes and now Porsche is that with vehicles so long-lived, there is in fact a good revenue stream to be had by muscling in on the business of maintenance and restoration of the entire back-catalogue of their cars. As Porsche note, nearly all the cars they’ve ever made are still around. Sure, a lot were made in the last 20 years but there is a substantial number of cars owned by affluent people who would rather entrust their car to the people who made it than many of the other small firms trying to trade in vehicle maintenance services.
Such revenue as can be captured has two beneficial effects. One is simply to make money. The second is to keep those old cars on the road as rolling adverts for the newer ones. As I have said before, every W-123 Mercedes that you see in daily use is a testament to the quality MB would like you to think the new cars have. Porsche can make the same claim.
So, how far can this model go? Well, the premium manufacturers are in with a good chance to try extending the reach of their dealer network. That would be Jaguar, Ferrari, and Lamborghini. I have a feeling BMW might not have the long-term cachet to justify such an enterprise. Maserati’s governance has been too shaky to ensure the existence of the plans and tools. Ditto for Alfa Romeo. Other manufacturers with a bit of intelligence might want to explore this option even if they don’t trade in longevity: Ford and Opel/Vauxhall have a large fan-base of owners who would probably very much like to have official support for their Granadas, Escorts, Senators and Kadetts. I don’t see Fiat, Peugeot, Citroen or Mazda heading down this path.
Another way to consider the business is to think that perhaps in future money will be made maintaining cars, even past the first lease or the initial warranty because there are fewer new ones being sold. The car might become a long-term durable like a house that is updated and renewed rather than like a washing machine to be thrown away. For Porsche the move is rather obvious given that people view their cars as durable goods and not disposables. The customer-base is rich and willing to pay for spares. The next thing is to see which maker goes down the path of reclaiming their brand’s heritage instead of turning their backs on it.