Is Your Porsche an Endangered Species?

According to an article in the German Edition of the Financial Times, it’s possible that Porsche as we know it (at least in the United States) may be extinct in just a few short years!

In May of 2009 President Obama proposed a 5% year over year increase to the current Corporate Average Fuel Efficiency (CAFE) MPG requirements. Starting in 2011 and ending in 2016, these changes would see the current requirements rise all the way to 42 MPG for cars and an average of 35.5 MPG for the fleet. Assuming these ammendments get written into law this May as planned, Porsche would be in a world of hurt.

What about VW you say? Wasn’t that part of the strategy behind the proposed takeover merger? Well, yes and no.

Remember way back when in the days of Wiedeking, when Porsche was going to take over VW and bankrupt all the nasty hedge funds that had shorted their stock? If so, you probably remember a lot of the talk around the reasons for Porsche’s play for VW. Most of that chatter centered around CAFE. The idea was that with all those fuel efficient VWs (and other makes) now part of the Porsche corporate umbrella, any possibly new CAFE rulings could be handled by averaging the fuel efficient VWs and other TDI toting technology with Porsche’s passion for petrol.

Unfortunately, as we all now know, Wiedeking’s master plan didn’t go so well and Porsche not only didn’t take over VW, but ended up getting taken over themselves in order to survive. The problem with this according to Bertel Schmidtt at the Truth About Cars is, “Porsche would have had to be under Volkswagen’s umbrella in the year 2009 [in order to count for the new CAFE regs]. They weren’t.”

Fortunately, for all of us, Porsche received a stay of execution through a special dispensation that sees them through 2016. However, if the proposed rules do go into effect, Porsche would basically need to increase their Corporate fuel efficiency 10% a year, every year. Something that is “technically impossible” according to Porsche-Lobbyist Stefan Schläfli (Schläfli helped to negotiate Porsche’s reprieve until 2016).

Worst Case Scenario

Under the current CAFE rules Porsche already pays a small fine of a few hundred dollars per car; something that is easily absorbed by Porsche or passed along to you/me the consumer in the MSRP. However, under the new laws, the federal government would be able to collect a maximum fine up to $37,500 per car. An amount not even the most well heeled Porsche owner would want to pay and certainly nothing VW would absorb.

Of special political note is the fact that the culmination of these new regs don’t go into effect until 2016, the year that President Obama would leave office assuming he was re-elected (which is looking highly unlikely at this point).

Alarmist? You bet. Possible? Probably not, at least not in our opinion, but it does make for an interesting headline. What say you? Is our beloved Porsche in danger here in the USA? Or, is it political suicide to deny those of us that want it our right to buy a Porsche (and many other German luxury brands for that matter).

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[Source: Bloomberg, TTAC, The Financial Times, Autoblog]