Porsche Bows to Lower Demand, Trims Production

(MoneyWatch)  Luxury automotive brands have a reputation for being "last-in, first-out," of a recession.

That's not quite the same as being recession-proof, as Porsche AG illustrated in a Nov. 25 announcement that it is cutting eight days worth of production through the end of January, on top of normal holidays.

"Even Dr. Ing. h.c. F. Porsche AG, Stuttgart, cannot escape the current economic crisis in the automobile industry," the company said, using its formal name. Porsche also disclosed it no longer expects to match unit sales for the fiscal year, versus the year-ago period. In its most recent fiscal year, Porsche had worldwide record sales of 98,652 cars and SUVs.

Porsche's fiscal year ends July 31, 2009. For the 12 months ended July 31, 2008, sales in North America were down only 3.1 percent, to 32,533, the company said.

The end of October marked the end of Porsche's first fiscal quarter for the 2008-2009 fiscal year. U.S. sales were awful for that period for Porsche and for other luxury brands, according to AutoData Corp. In August, Porsche's U.S. sales were down 44.9 percent from the year-ago month; in September, down 44.8 percent; in October, down 50.1 percent, to only 1,427.

Developing markets for luxury marques like Porsche and BMW are helping offset the downturn in mature markets like the United States. But sales are still relatively small in China, India, Russia and other Eastern European countries that made up the former Eastern Bloc.

To be sure, Porsche's production cut is modest compared with the trauma that Ford, Chrysler and GM are experiencing. And the company is still on a roll in other ways, such as Porsche recently taking a controlling share in much bigger Volkswagen AG and making money off the stock market when VW shares suddenly skyrocketed, driving up the value of Porsche's VW shares.

But the recession is showing everybody's human, "even Dr. Ing. h.c. F. Porsche AG, Stuttgart."