Sales Slumping, Porsche Will Replace Chief
Porsche, the West German luxury sports car maker whose sales have dropped severely in the vital U.S. market, will replace its chief executive with a cautious accountant.
Porsche AG said Peter Schutz, 57, was stepping down at the end of 1987, a year before his contract expires. He will be replaced by the company’s longtime finance director, Heinz Branitzki.
A statement said the departure of Schutz, who joined Porsche as management board chairman in 1981, was in “mutual agreement.”
But industry sources said Porsche’s supervisory board had become increasingly vexed with Schutz over the past year because he did not do enough to reduce Porsche’s dependence on the United States.
There had been some speculation in the West German press that Porsche might be looking for a replacement for Schutz.
Peter Dupont, stock analyst for UBS-Philips & Drew in London, said the fact that Schutz was leaving a year earlier than planned indicated that Porsche’s situation could be getting worse.
The most likely reason for Schutz’s early departure was Porsche’s disappointing performance in the United States, he said.
Porsche, which sells more than 60% of its sleek sports cars in the United States, has seen sales and profit plummet in the past two years due to the dollar’s sharp fall against the West German mark.
Industry sources said Schutz, a West German who spent most of his life in the United States, was also criticized for not changing Porsche’s models when the Japanese auto makers started making inroads into the lower end of the luxury car market.
Porsche said in September that it planned to concentrate on selling its expensive top-range 911 and 928 models to combat the slump in U.S. sales.
The luxury car maker has also cut back production of its cheaper 924 and 944 models, produced under contract by Audi AG, a subsidiary of Volkswagen AG.
One source said: “The good times are over at Porsche. Branitzki has been brought in to clean the place up.”
Branitzki, 58, has been responsible for Porsche’s finances since 1965, and sources described him as a cautious, reserved manager. He was concerned about Porsche’s overexposure in the United States and had taken steps to hedge against a further dollar fall over the next year, they said.
In the year ended July 31, 1987, Porsche’s World Group revenue fell to $2.09 billion from $2.19 billion the year before.
Group and parent net profit slumped to $46.2 million in 1985-86 from $73.8 million the year before. Porsche said the 1986-87 profit, due to be announced in January, should fall by 10%.
