'We are a global product for the entrepreneurs who have earned money through hard work and smart ideas, and want to reward themselves for what they have earned,' CEO Porsche Pakistan

BR Research: What is Porsche?
Abuzar Bokhari: People who do not know about our brand think that Porsche is a luxury car, whereas in reality, Porsche is a performance car. That is why, among all the European cars, it is considered as one of the most reliable. We are not a product for multi millionaires or billionaires; we are a global product for the entrepreneurs, who have earned money through hard work and smart ideas, and want to reward themselves for what they have earned. This is our global philosophy, and that is how Porsche product is engineered.
In every performance aspect of driving, Porsche exceeds its rivals other than speed; our performance parameters are driving dynamics like economy, safety, handling, braking, steering etc in which the company strives for a competitive advantage. And it is only the entrepreneurs in any field - hardworking and intelligent people - who can appreciate and understand all that as they themselves strive for the excellence in their companies. The Porsche car is expensive for the amount of engineering that goes into it. This is a very powerful valuable proposition as it extends the life of the product and the material that goes into it. Porsche is the only can company in the world that backs up the engineering with 10 years guarantee. It is also the only car company in the world that is German engineered, and 100 percent German manufactured unlike many of our competitors where engineering might be done in Germany, but a major part of production is offshore.
BRR: Why invest in Pakistan?
AB: Pakistan is a growing market with huge potential in the future. I think Pakistanis are good entrepreneurs, so there are lots of Porsche potential customers who want to enjoy their success. It's just the right kind of product and the right prices for the niche segment of the market. I can tell you that majority of our customers are all honest apprized tax payers
BRR: How many units are being sold every year globally? How does it compare with its competitors?
AB: We have two facilities in Germany, and Porsche approximately sells close to 170,000 units annually. It would be slightly unfair comparison for a niche performance car and other car manufacturers that also caters to user utility sector with trucks, vans taxis etc. There are three broad categories in the passenger automotive sector: economy (500cc-1100cc), value (1100cc-2400cc) and premium sector (2400cc and beyond). Porsche operates only in the highest level of the premium sector. Therefore, our numbers are much smaller than the other car manufacturers. There are many players out there that are premium segment brand, but are operating in the economy and value segment as well. Also, with Porsche it is always the top down approach rather than the bottom up approach of the other car manufacturers; Porsche launches the premium models with the highest engineering first and doesn't come down much, while the other manufacturers launch the basic versions first and then add on to them to move towards high premium ones. We are actually in a process of transition on how cars and their performances are perceived, and the performance based on engine size is changing rapidly around the globe where there will be smaller engine with higher performance, and we will have to catch up if we want to compete.
BRR: Did the government policy of introducing hybrid cars work here in the country?
AB: I think it did. Fourth generation hybrid cars are the future now, and the government did a very intelligent thing by bringing them into the system. Technically and logically speaking, hybrid technology is for the people who need the value of money more. The interesting thing is that's not how the world works; it is the successful people who are adopting this hybrid technology, and when the successful people are driving a hybrid car, the chances are that not so successful people would be more likely to take up that technology as an aspirational quality. It is not about the numbers but the fact that people are embracing this new technology. Even the consumers here are very intelligent. The only sad thing about it is that there are very few options available in the market for hybrid cars. What we need is to open up competition in the market place for the manufacturers whether it is the CBU (Complete Built Up) side or CKD (Complete Knock Down). We need to have a more consistent and a more long term policy rather than a cyclical annual approach that we have, where each year you have to wait and see whether you investment will survive or get wiped out the next fiscal year.
BRR: You don't see any new manufacturers entering the auto sector, whereas in the local motorcycle sector you can see more competition, less protection, price stability and millions of units being produced. Why is that?
AB: A couple of international factors have stopped inflation in the local motorcycle sector. First, it is the China phenomenon that has played a major role in keeping the costs down; the availability of low cost parts and competition from China. It also point towards a major opportunity for the automobile sector. From the regulatory perspective, I think that the government should try and expand the economy sector of the auto segment as that is where the greatest growth can be achieved, and that is where protection for local manufacturers is needed. And we are hopeful that with Pakistan China Economic Corridor (PCEC), the competition will be opened. It is time to look beyond the policy of focusing the size of engine to the efficiency and output of the cars.
BRR: What are the future plans for Porsche?
AB: We are actually expanding our infrastructure; we just opened up a new Porsche centre in Karachi. We are also looking at the possibility of opening one in Islamabad. We are also expanding to full scale showrooms in Lahore, which will include all facilities from car sales to after-sale services. Especially after the introduction of the second SUV, our product range now requires expansion.
BRR: How many products are you selling in Pakistan?
AB: We are selling almost everything under Porsche brand globally here. Porsche is highly customized car manufacturer, so the buyers normally like to individualise the cars. We have a standard catalogue; then there is the second tier that includes sports equipment. Above that is Porsche exclusive. So you can order a customized car, or we also have cars in pipelines for people who do not have time to go through the process of ordering it.
BRR: What's the future for cars?
AB: The future for cars is hybrid, and we recognize the efforts made by the government in this regard. The world's three most desirable cars on the planets are hybrids. Hybrid technology however can be much used or abused. So, the government needs to recognize and make an intelligent assessment of what a hybrid is as it could seriously help the government to address one of the major causes of imbalance in the balance of payments - the petroleum imports. As far as the price is concerned, we need to have a long term automotive policy brings into account our economic growth, aspirations and needs, and that subsidises the economy segment, supports the value segment, and taxes the premium segment in a realistic manner.