Brief History of Porsche – Engineering at its Finest

In 1875,in the small town of Maffersdorf in Czech Republic, one of the greatest automobile engineers in history was born; Ferdinand Porsche. From an early age Ferdinand was always interested in automobiles.He had a great taste for engineering vehicle mechanics. In 1898 at the age of 23, Ferdinand produced his first car which was called the Porsche P1. This however, was not your ordinary car as it run fully on lead acid accumulator batteries. He later realized that it was too heavy hence he resulted to a combustion engine.

After this modification, he became one of the earliest adopters of a hybrid car system in history. It topped at a speed of 60km/h (37mp/h) which was very impressive at that time. In 1902, he was drafted into the army and worked as Archduke Franz Ferdinand’s Chauffer.Later he returned to the automobile industry. In early 1920’s Porsche moved to Stuggart Germany where he was employed by Daimler as the technical director. While working for Mercedes, he developed one of the best cars at that time; The Mercedes Benz SSK which topped at an impressive speed of 193 Km/h.

By 1931, Ferdinand Porsche had saved enough money to start his own business but did not fair well as the German economy at that time was not doing so well as not many people could afford cars.

Then Hitler came along.

In 1933, January 30^th , Adolf Hitler became the Chancellor of Germany. A few days later, at the Berlin auto show, Hitler said that he wanted every household in Germany to own a vehicle which could accommodate a family of 5 and was fuel efficient.

He specifically said that he wanted a car ‘wagen’ for the people ‘volks’. ( Volkswagen). However, the transition was not that swift. Hitler employed the best engineers that he could find and one of them was Ferdinand Porsche. He employed these engineers to work on a car which was later known as the beetle. This was in 1934 and it improved over time. This was the beginning of Volkswagen as we know it today.

Ferdinand’s Imprisonment and re-ignition of Porsche.

Later, Ferdinand Porsche was recruited during the cold war for various military projects such as the Elephant Heavy Tank Destroyer. Due to this, Ferdinand was imprisoned in 1945 and by the time he was out, his son Ferry Porsche had already started making cars under the brand name Porsche.

In 1948, he released the Porsche 356 but it never took off until it won the 1952 Le Mans Race. Porsche continued producing the Porsche 356 until 1965. This is because another car in the sports segment known as the 356 was in progress. This car was later named the Porsche 911 which is still in production to date. The Porsche 911 started being developed in 1963 and became a huge success for Porsche.

The Porsche 911 was synonymous with a rear engine which air cooled. Over the years it won lots of rallies and races including The Paris- Dakar Rally, The Traga Florio Rally, The Monte Carlo Rally just to name a few. This car was later referred to as the more civilized Porsche 356. Porsche became very successful in the 20^th century. But in early 2000’s, Porsche took a very bold move which almost shook the automotive engineering.

Porsche was always known for producing Sport vehicles but in 2002 it produced it’s first SUV; The Porsche Cayenne. This was a bold move but it paid off eventually as both the Porsche Cayenne and the Porsche Macan produce over 60% of revenue for Porsche. The Porsche Macan is the smaller brother to the Cayenne. It is a sleek and classy looking crossover which has attracted many young buyers over the years.

How Volkswagen acquired Porsche.

After World War II Volkswagen sales sky rocketed sell as much as 60X the sales of Porsche which was stunning especially for a young company at that time. In 2005 Two of Porsche’s executive directors, Wendelin Wiedeking and Holger Harter decided to acquire Volkswagen but Volkswagen was way bigger for Porsche to acquire.

So they decided to take a different approach to this matter. They started buying a lot of Volkswagen stocks. Their investment was paying off and they used that money earned to reinvest it in buying more of Volkswagen stocks. Their scheme was definitely ingenious as Volkswagen stocks quadrupled during that period making Volkswagen the most valuable car company globally for a moment. By 2008, Porsche controlled 74.1% of Volkswagen.

Their efforts were finally paying off but there was one problem to all this. If Porsche wanted to access the billions of Volkswagen cash reserve, they needed to own at least 75% of Volkswagen according to the German Law. But at this point Porsche was broke. This is where things started to fall apart for Porsche. As if that was not enough, the great recession of 2008 happened and banks demanded for their money. Porsche at this point was in trouble.

Funny enough the two executive directors at Porsche were prepared for such an ordeal. Earlier in 2007, they had setup a holding company known as the Porsche Holdings which kept manufacturing afloat. But thins got even worse and the holding company went bankrupt too. This is where Volkswagen came in. They bought the Porsche Manufacturing company which ended paying off their debt. Porsche eventually paid off their debt and still kept a 30.8% stake at Volkswagen.

This was almost a win-win situation. I bet you are wondering what happened to the two executive directors after all this fiasco. Well, they ended up walking scot-free. Porsche is afloat and is still doing well with it’s two SUV’s the Porsche Macan and the Porsche Cayenne producing over 60% of revenue of all cars Porsche makes. And that’s how Porsche rose and became one of the best automobile company in the world. As for Volkswagen it has grown into a global giant and is now the parent company to Porsche, Bugatti, Lamborghini, Audi, Skoda, Ducati, Scania, MAN, and also Bentley.