Porsche concerned about delays due to Red Sea disruption, regional head says

Luxury car maker plans to bring its latest Macan to the region in the second half of this year

Porsche delivered 9,135 cars in the Middle East, Africa and India region in 2023. Photo: Porsche
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Luxury car maker Porsche is concerned about potential delays due to the disruption of shipping in the Red Sea, although there has been no impact on production so far, its regional head has said.

“It's a concern currently in terms of delays or product arrival. But that's really all for now,” Manfred Braunl, chief executive of Porsche Middle East and Africa, told The National on Friday, on the sidelines of a press briefing.

“So, we all hope for the best [and for the conflict to end].”

The escalating conflict in the Red Sea, as attacks on shipping vessels by Yemen's Houthis intensify in retaliation against Israel's bombardment of Gaza, has reignited inflationary fears and concerns over supply chains.

Shipping companies have suspended operations on the route and are rerouting through the Cape of Good Hope, which, in turn, is adding more time and cost.

The route joins Eastern Asia and Europe to the southern parts of Africa.

Electric vehicle maker Tesla on Friday said it was suspending most car production at its factory near Berlin for two weeks from the end of this month, due to a squeeze on component supplies.

“The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Gruenheide,” it said.

The latest shipping disruption threatens to derail supply chains just as they were steadying following the Covid-19 pandemic and the Russia-Ukraine war, which began in February 2022.

For Germany's Porsche, waiting times for some of its models, which had been extended to more than a year during the peak of disruptions, have now normalised, more or less, to pre-pandemic levels, Mr Braunl said.

“Waiting times in general have been significantly reduced. And if I compare this to two years ago, and it still depends a little bit also on the model line, … we are going now back to kind of a normal one,” he said.

“When the war in Ukraine started, there were a lot of suppliers affected. And, of course, this had immediately also an impact on the production. So, it was a mix of suppliers and also of logistics, and both of these things have significantly improved right now.”

Despite the disruptions, Porsche did not raise its prices in the region.

The company delivered 9,135 cars in the Middle East, Africa and India region last year, an increase of 11 per cent annually, it said on Friday. New car deliveries since 2020 have now grown by 47 per cent.

The Cayenne was the best-selling model for Porsche in the region last year, as a new model was launched.

Meanwhile, the Taycan all-electric sports car also reported strong sales, up 80 per cent from the previous year.

The Taycan currently accounts for nearly 10 per cent of sales across the region, indicating the strong trend towards electrification, said Mr Braunl.

“People are buying electric cars for multiple reasons. Of course, they're buying it for environmental reasons, but an electric car has also different things which people like. It has an amazing acceleration. It is full of new technology. And I think this is also what customers really are going for,” he said.

In terms of electric vehicle infrastructure, some countries in the region, such as the UAE, are more advanced, although the infrastructure is currently in a development phase across the board.

Porsche currently has 326 destination chargers in the Emirates, in locations such as malls and hotels.

The brand is currently working towards its goal of having 80 per cent of its cars being all-electric by 2030, Mr Braunl said.

On Thursday, the company said it was putting the prototype of its next generation all-electric Macan through a test programme before its launch later this month.

“And then, in the second half of the year, we will also see it here in the [regional] market,” he said.

Regionally, Porsche plans to expand in Morocco this year. It is also studying the Saudi market, although there are no concrete plans in place as of now.

“I think when you see the product line-up, and we see the strong customer base we're having, [we are] definitely optimistic for this year, and we just hope that all these conflicts come down, and the economy stays strong … It's important to be optimistic, and that's what we are,” Mr Braunl said.

Updated: January 12, 2024, 5:59 PM