Special Coverage

Chicago Auto Show

CHICAGO – The Earth remains on its axis, although Porsche purists had their doubts when the German auto maker launched its first cross/utility vehicle, the Cayenne, in 2004.

The ’08 model year brings a second-generation Cayenne to the Porsche portfolio, and the latest entry is the 405-hp Cayenne GTS, unveiled this week at the Chicago auto show. It goes on sale immediately in the U.S., priced at $69,300. The all-new base Cayenne launched last March.

With a standard air suspension, lower ride height than the Cayenne S, standard all-wheel drive, larger wheels and tires and a 6-speed manual transmission (a first for a V-8 SUV or CUV), the Cayenne GTS “is the best-handling SUV in the world,” David Pryor, vice-president marketing for Porsche Cars North America Inc., declares at the unveiling.

The Cayenne has done plenty for Porsche’s bottom line. Each year since it launched four years ago, Porsche has boosted its U.S. sales volume. In 2007, the auto maker sold 34,693 vehicles, a 1.4% increase from 2006, according to Ward’s data.

Likewise, Cayenne deliveries in 2007 were 12,547, an 18.7% jump from 2006, according to Ward’s data. The Cayenne narrowly outsold the 911 sports car in 2007, while Porsche car volumes were down 6.4% from 2006 to 2007.

PCNA President and CEO Peter Schwarzenbauer notes the healthy sales pace for the Cayenne came “in an environment that wasn’t very favorable for the automotive industry.”

Economic troubles and the credit crunch in the U.S. are hurting high-income buyers, and Schwarzenbauer says Porsche is bound to feel its effects.

Schwarzenbauer says the luxury segment has softened during the last three months and expects it will decline in 2008 from 2007.

“We forecast what we call a mild recession,” he says. “If it is a mild recession, we don’t see a huge impact on our forecast.” Something deeper, however, will be more problematic, he says.

Meanwhile, Schwarzenbauer says Porsche remains focused on improving the fuel efficiency of its high-performance vehicles, while remaining true to the brand’s sporty heritage.

A hybrid-electric Cayenne launches in 2010, and the 4-door Panamera arrives in 2009, followed “a little later” by a hybrid version of the sedan, Schwarzenbauer says.

“We still think there is a lot of potential in the petrol engine to reduce further fuel consumption,” he tells journalists. “And we have seen it with the Cayenne. We have reduced fuel consumption 15% in one generation. There is room to improve.”

The Cayenne GTS, with its normally aspirated 4.8L direct-injection gasoline V-8, is rated as an ultra low emissions vehicle and incorporates Porsche’s VarioCam Plus valve lift and timing control. With 405 hp, it has a 20-hp edge over the Cayenne S and can sprint to 60 mph (96 km/h) in 5.7 seconds.

With the manual gearbox, the Cayenne GTS achieves 11/17 mpg city/highway (21.3-13.8 L/100 km). The 6-speed automatic Tiptronic S transmission improves consumption to 13-18 mpg (18/13 L/100 km).

That’s a far cry from 35 mpg (6.7 L/100 km), the federally mandated fleet average all auto makers must achieve by 2020.

Still, Schwarzenbauer is confident Porsche will be able to sell high-output V-8s by 2020, especially as the hybrids roll out. “People are asking for this,” he says. “It is good for a further reduction (in fuel consumption) of 30%. I think we can fulfill the standards.”

Schwarzenbauer says Porsche has no plans to bring a diesel to the U.S., although they offer better fuel efficiency.

With Porsche’s equity stake in Volkswagen AG, Schwarzenbauer was asked if the luxury auto maker is attempting to lower its carbon-dioxide emissions with the help of VW technology.

“We are working together with the VW Group on all kinds of technologies – CO2 is only one area where we are cooperating,” he says. “It’s too soon to give you many details.”

Porsche owns 31% of Volkswagen, although widespread speculation suggests it is attempting to purchase 51% of the Wolfsburg, Germany-based auto maker.

When asked if Porsche is buying additional VW stock, Schwarzenbauer says: “We are prepared to move in any direction, if needed.”