Economies of scale: Learning from the past and planning for the future
Friday, June 30, 2017
I just returned from an aggressive tour of Germany — a weeklong trip from Berlin to Munich with several stops along the way. Much of the journey was spent getting to the next place on the schedule — trailing the Alps alongside the Autobahn where the mountains were perpetually attached to the horizon.
As incredible as this vacation was, I confess to being somewhat disappointed in Germany's inventory of cars. I can see more Porsches in a single day at my local Starbucks than I did the entire week of my trip. Sure, there was a random Boxster and occasional Carrera, but nothing like what we can see around here in the states every day.
I also noticed a substantially higher ratio of small to larger vehicles, even on the Autobahn. And marques I never heard of or haven't seen in years — Skoda, Renault, Smart and Seat producing miniature driving machines by the tens of thousands.
Come to think of it, virtually everything on the road appeared smaller, lighter and more efficient.
Guess what's conspicuously missing? Germany is decidedly absent of SUVs. With the rare exception of the errant Audi Q5 or Porsche Macan, they seem to get away with hatchbacks just fine. Conversely, I'm a little embarrassed to say I own two of the sport utility variety — and looking around the neighborhood, I am not the exception.
While in Berlin, I visited briefly with my German brother who lived with us in the 1970s as a high school exchange student, and I asked for his thoughts on the subject. He laughed and politely lectured that they had learned their lesson from the oil crisis of that era — the effects of which he had witnessed for the year he lived with us.
His inference, of course, was that the U.S. learned nothing from the shortages and lines at the gas stations, something we really cannot deny. Though efficiency from American car manufacturers has improved significantly since the oil embargo, we continue to engineer vehicles that drain our fuel tanks.
In defense, Germany mandates enormous taxes and surcharges making our vehicle luxury tax look like change in a fountain. It should not then surprise me that there was also a shortage of luxury and performance cars, as only the truly rich can own the extravagance that is downright commonplace here in the U.S.
We don't really discourage excessiveness when it comes to our cars either. Instead, the ownership of frugality lies with the manufacturers to meet our pent-up demand rather than tightening our own belts. While other countries economize, our craving for power and performance has never been higher.
We are most fortunate to live in a nation where Porsche ownership is almost reasonable, which is why I see more of them here than I did in the country that builds them. And as much as we complain about operating costs, fuel remains consistently cheaper here — making it all the more difficult to curb our collective appetites.
We are not immune to legislation that dictates the efficiency of the automobile, however. The Corporate Average Fuel Economy (CAFE) standards were developed in response to the oil crisis, requiring a progressive average fuel consumption rate for the entire fleet of a car manufacturer for all vehicles sold in the United States.
You can imagine these efficiency standards are far more concerning to a brand like Porsche than say Honda, Toyota or Fiat. And the most popular Porsche models are now the Cayenne and Macan SUVs, which makes meeting those requirements all the more difficult. Porsche must offset their sales with other models to equalize the net average.
The Porsche 718 Boxster and Cayman — two products whose predecessors have collectively represented the entry point for Porsche owners — are now feeling those effects. They were originally equipped with the popular flat-six power plant, but beginning this year, the German brand will permanently modify this lineup with a turbocharged flat-four.
Before you respond with rage by the change from normally aspirated motors to smaller power plants with forced induction, you would have to concede we brought this on ourselves. The appetite for fossil fuels in this country coupled with a regulated requirement for efficiency has dictated the transformation.
Luckily, turbocharging is nothing new to the manufacturer from Stuttgart. Porsche has been using this technology for years and has progressively engineered turbos into their entire line. But it's been quite some time since we've seen them bolted to a four-cylinder engine — and replacing that glorious flat-six seems almost sacrilegious.
But times, they are a-changing, and we should be thankful that Porsche is getting ahead of the curve. The fact that the Boxster and Cayman lineup are actually faster and more responsive than the previous generation, should repress any backlash from their loyal clientele. But it's not been well received from the Porsche customer base — so far at least.
Porsche is laying odds that any reservation you might have had of moving to smaller displacement in an already proven midengine design will be offset by the substantially potent and torquier power plant. The new flat-four motor pulls eagerly from as low as 2000 rpm. The question is whether that will be enough to satisfy buyers.
I was a pessimist when I first heard about the transition — I loved the motor in my 2009 Cayman. But I also like the turbo in my Macan S. From my many discussions with Porsche enthusiasts of all types, it appears the reduction of cylinders is what causes controversy, not the addition of turbocharging.
And then there is the sound — many Porsche fanatics are enraged by the change in tone. Even with Porsche's Sport Exhaust system, there's only so much you can do when you've removed a third of the cylinders. But the way I look at it, I grew up on muscle cars and never thought a flat-six could ever sound as good as a V8.
It must be frustrating for the engineers and decision-makers at Porsche when all they do is crank out faster and more potent cars with every generational turn — and still maintain (or even improve) efficiency.
Yet the collective voice of Boxster and Cayman supporters is deafening. Could we really be this upset, or are we just indiscriminately whining?
I remember we laughed when the first generation of electric cars came out. Golf-cart technology we called it. But later, companies like Tesla proved that battery-powered transportation not only had a place on public roads, but could compete on racetracks as well. And now many supercars employ the same technology, including Porsche's 918.
And in the coming years, we all expect Porsche to roll out the Mission E — a fully electric car with technology that does not yet exist in any production vehicle. The Porsche community is frantically buzzing with anticipation, and there is no doubt this risk is appreciated.
Yet the Mission E will not make a throaty noise, and will not be available with a manual transmission — two of the requirements many Porsche aficionados use as cantankerous ammunition. I say this, of course, a little bit tongue-and-cheek, but I'm not sure you could effectively argue the point.
As a country, Germany has accepted the kinds of products and technology we have all been resisting for years, and as a manufacturer Porsche has been at the forefront of delivering them to their customers in gorgeously engineered packages.
So isn't it time we embraced the inevitable? Porsche is certainly relying on it.
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