Porsche Boosts Top SUV With Big Screen to Counter Trade Risk

(Bloomberg) -- Porsche is making its best-selling model more comfy with a bigger touchscreen, voice controls and self-driving features, upgrades that woo customers as the German sports-car brand braces for a potential sales-sapping trade war.

With President Donald Trump threatening to levy tariffs on cars imported from Europe, Porsche will equip the Macan sport utility vehicle with an 11-inch high-definition screen, four inches larger than the current version, the company said at an unveiling Wednesday in Shanghai. The enhancements to the model, which starts at $47,800 in the U.S., will be rolled out in the course of this year.

Porsche makes all its vehicles in Europe, exposing the Volkswagen AG brand to the full brunt of Trump’s potential tariffs. European Commission President Jean-Claude Juncker and EU Trade Commissioner Cecilia Malmstrom are due to meet with Trump in Washington on Wednesday in a last-ditch attempt to avoid an all-out trade war.

“We hope we won’t have any negative impact from tariffs,” Detlev von Platen, Porsche’s sales chief, said in an interview with Bloomberg TV.

But if Trump does push ahead, the result would likely be higher prices for American buyers as Porsche looks to defend its profit margins. “We won’t be able to swallow all the increased tariffs,” von Platen said from Shanghai.

Air Ionizer

To boost the Macan’s appeal, the new creature comforts include an ionizer to improve air quality, real-time traffic information and a function that assists with steering, braking and acceleration in stop-and-go traffic. Porsche had sold more than 350,000 Macans since the introduction in 2014. It’s the bestselling model in all major sales regions -- including China and the U.S., its top-two markets.

Porsche has resisted adding production outside Europe, because German engineering is part of the cachet that supports some of the highest profit margins in the auto industry. While Porsche is in the throes of Europe-U.S. trade tensions, China’s move to lower import tariffs is good news for the brand.

Still, China’s luxury-car market has faced pressure due to a weakening yuan that’s made it costlier to buy imports. Consumers also delayed purchases amid uncertainty over pricing after China cut its auto import tariff to 15 percent from 25 percent, and raised the rate on imports from the U.S. to 40 percent. Deliveries of Porsche cars in China declined 7 percent in the first half of this year to 33,363 units.

As new rivals enter the auto industry and changing technology intensifies competition, Porsche is seeking to step up the pace in adding features to entice buyers.

“If you want to be successful as a global player in the car industry in the future, especially at a time when the world is changing so fast, the key success factor is not to be big but to be fast,” von Platen told reporters in Shanghai.

To contact Bloomberg News staff for this story: Yan Zhang in Shanghai at yzhang1044@bloomberg.net;Christoph Rauwald in Frankfurt at crauwald@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Chris Reiter, Elisabeth Behrmann

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