Merchant Innovation

Porsche Passport Lures Younger-Than-Expected Drivers

Porsche Passport, the luxury car maker’s subscription service that enables users to access Porsche cars through a mobile app, is luring in younger-than-expected drivers, reported CNBC.

Klaus Zellmer, Chief Executive of Porsche North America, told CNBC that the program, which is just live in Atlanta since November, is attracting drivers who wouldn’t typically drive their cars. “We engage people with a brand that they usually wouldn’t,”  Zellmer said. “We’re conquesting a target group, and engaging them with a brand, who do not want to commit to a three-year lease. They just want to go month by month and are willing to spend for that.”

With the monthly subscription, customers pay either a flat fee of $2,000 or $3,000. It includes a $500 activation fee, credit check and also covers vehicle tax, registration, insurance and maintenance. The users can download the app and start scheduling future rides on the same day. Porsche is working with Atlanta-based Clutch Technologies, which developed the app and already markets a vehicle subscription service in parts of the country. Porsche is hoping to attract two types of customers: someone on a long-term stay in Atlanta for business and a successful millennial who would prefer to experience driving a variety of vehicles instead of buying just one. Some subscribers could also use the service as an extended test drive. Dealers will benefit from getting all maintenance and repair work, as well as the vehicles, to sell used after they move out of the Passport fleet.

CNBC noted the program could be boosting Porsche’s sales — it logged its eighth year in a row of growth in  2017 at the same time that overall U.S. new vehicle sales were down 2 percent.  In March, auto sales in the U.S. are likely to come in up 0.4 percent year-over-year, as forecast by J.D. Power and LMC Automotive. That increase is likely driven by discounts that won’t be sustainable. Sales of new cars in the U.S. are forecasted to decline more in 2018, noted the report.  Zellmer told CNBC that the growth is due to several things including tax reform and changing lifestyles of consumers.  He said growth in the U.S. in 2017 was driven by the economy and that Porsche last year had a “fantastic year.”

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