The true depth of the damage done by the COVID-19 virus will not make itself known for months. As it spreads around the world, every single industry, government, and person must deal with the fallout in whatever way we can. The first thing anyone can do is to isolate in their homes and keep contact with other humans at a bare minimum. There are so many vulnerable people in this world who may not survive, and it's important that we keep to ourselves for now.
Closing The Factories
As a result of this isolation order from health experts worldwide, Porsche took proactive measures to close down its production lines in Zuffenhaustn and Leipzig before any mandates came down from Germany. Porsche has always taken care to keep its employees safe and this is simply an extension of that caution. The initial closure was scheduled to last two weeks, but it's looking unlikely that the plant will open up again in the near future. In addition to the need to isolate its employees, the demand for new cars has been decimated all around the world.
“With these measures, our company contributes to protect the workforce and reduce the spread of the coronavirus. The actual consequences are not yet predictable. It is therefore too early for forecasts. What is clear is that 2020 will be a very challenging year,” says Oliver Blume, Chairman of the Executive Board of Porsche AG. “We can only overcome the pandemic together and by taking rigorous measures.”
In addition to the closure of the production facilities, Porsche has suspended all travel for company executives, the ability for desk-bound staff to work from home has been promoted, and all meetings have been moved from in-person to teleconferencing or video chat.
How Porsche Is Supporting Dealers
"We are all focused on our families and the health of those most at risk in our country right now. At the same time, not only are our customers counting on us, but also our dealers and their employees are looking to us for support – to keep their cars on the road and to allow their businesses to continue to operate in challenging and uncertain times," said Klaus Zellmer, President and CEO of PCNA.
- In order to help dealerships offset the cost of storing the inventory that is currently sitting on their lots, Porsche has issued a floorplan assistance program. This program will suspend the costs of inventory payments for new and pre-owned cars on dealer lots for a period of 60 days.
- Porsche Cars North America is offering dealerships a reimbursement for new vehicle home delivery services. Porsche has been offering a home delivery program for years, but for the next month and change the national corporation will reimburse those costs that dealers usually take on themselves.
- Porsche is waiving its requirements for dealer performance bonus programs. All dealerships will receive a 100% sales goal level payout for Q1 and Q2 of 2020. This will help these dealers continue to operate and hopefully keep staff layoffs to a minimum.
- All dealership training will be moved from an in-person event to an increasingly important series of digital resources for increasing product knowledge and other skills.
How Porsche Is Supporting Customers
- Porsche has allowed up to six-months of lease extensions on lease contracts scheduled to end within the next month. This allows customers to know that their car will still be with them when they need it. On a case-by-case basis, Porsche Financial Services will consider lease contract payment deferrals for customers who are in need of them. The majority of payment deferrals are 30-60 days. This has been done before, as it was incredibly beneficial to customers in the throes of the financial crisis of 2008.
- Porsche has been working to roll out a new digital program to sell new cars digitally. The system rolled out in October, but now dealers are fast-tracking the enrollment and install process. The majority of new Porsche purchases can now be conducted online. This is only a stop-gap measure, however, as it still requires buyers to make a visit to the dealership to sign paperwork. Porsche should be allowing customers to sign these documents in the comfort of their own homes, but I'm sure there is some kind of legal difficulty there.
- If you have a Porsche that needs maintenance or repair, Porsche is now offering home pick-up and drop-off services. If you are concerned about coming into a dealership or spending time in the presence of other people, Porsche can still help get your maintenance and repair needs met. Brilliant!
We will get through this crisis together, and we will come out the other side with a stronger idea of what humanity needs to conduct normal life in the middle of an epidemic. Porsche can't fix this situation any faster than you or I can, but they are doing what they can to make sure the effects are minimized. Stay safe. Stay inside. Stay Porsche.