ATLANTA — Porsche is experimenting with a vehicle subscription service in a bid to bring new customers into the fold.
A pilot program called Porsche Passport is rolling out in the Atlanta market, where Porsche Cars North America Inc. is headquartered, with vehicle deliveries set to begin in November. For a monthly fee of $2,000 or $3,000, members will have flexible access to Porsche vehicles via a mobile app. Porsche is working with Clutch Technologies of Atlanta, which already markets a vehicle subscription service in parts of the country and developed the app.
"Hopefully we can engage some people we normally don't engage with the brand," Porsche Cars North America CEO Klaus Zellmer told Automotive News.
Porsche envisions two types of customers for the pilot service. The first: someone on a long-term stay in Atlanta, such as a movie director in town from the West Coast who could subscribe instead of renting a car. The second type is a successful millennial who wants a variety of exciting vehicles to drive instead of committing to buy one. Some subscribers also could use the service as an extended test drive.
The experiment has a defensive element.
"If somebody offers customers in the future a subscription model for sports cars, and this potentially involves a few Porsches, but also some other cars, then we lose touch with our customers," Zellmer said. "One of our main guardrails for the future is that we want to maintain the control of the touch point with our customer."
What's in it for dealers? They'll get all maintenance and repair work, plus the vehicles to sell used after they move out of the Passport fleet, Zellmer said. There is no financial incentive for them to bring in members.
"As long as we don't replace people who would normally just buy a car, then everyone benefits," Zellmer said, "because it's additional business, and we protect ourselves from somebody else delivering this opportunity."
Atlanta Porsche dealer Peter Hennessy said he's hopeful the program will expand Porsche's customer base. But dealers also will watch to see whether Passport siphons away retail customers.
While that's a possibility, "I don't envision them as trying to put the dealers out of business. There is plenty of market out there," Hennessy said. "If anything, I think we will expand the market rather than cost dealers sales."
Even if it does pull away some retail sales, he said, it's better to partner with the manufacturer on a subscription model than wait for an unrelated party to set up a rival service that won't have the interests of Porsche or its dealers in mind.
The pilot doesn't have a set timetable. If it "goes horribly wrong," it could be over in six months, Zellmer said. If it seems to be working, 12 to 18 months is likely before expanding to other locations. Target markets would be major metro areas, possibly 10 to 20 in number.
In Atlanta, the pilot will be limited to 50 customers with a fleet of 60 to 70 vehicles. Having only 1.1 to 1.2 vehicles per member is key for profitability, Zellmer said. Members can make an unlimited number of vehicle switches, which Zellmer said differentiates the Porsche pilot from other subscription models such as General Motors' Book by Cadillac program, which costs $1,500 a month and allows up to 18 vehicle swaps a year.
Passport's $2,000-a-month plan includes access to eight model variants, including the 718 Boxster, Cayman S and Cayenne. For $3,000, members get access to 22 variants, including the 911 Carrera S, Panamera 4S and Macan GTS. The cost includes vehicle tax, registration, insurance, maintenance and detailing. Both plans have a $500 activation fee. Membership approval is subject to a background and credit check.
"Not having the burden of owning something, but having the full flexibility of using something, based on a flat fee per month, is something people will desire," Zellmer said.
"Will they desire it with Porsche and for the price we are asking? We are going to find out."