PAG was nearly bankrupt in March due to the unraveling financial games it played:

"... the Stuttgart-based carmaker teetered on the brink of bankruptcy for three days in March this year before it was rescued by a bridging loan of over €700 million guaranteed by Volkswagen."

Read more HERE.

More details from Der Spiegel.

 

Ever since Wiedeking took over his main focus was making more and more money with everything else being secondary bringing things to the point where Porsche makes the highest profit per vehicle compared to any mass produced automobile manufacturer; not to mention his latest financial scheme which now appears to have backfired. Wiedeking did once "save the company" from financial straights in 1993 but that was right before Porsche introduced the very popular(beyond what Porsche ever hoped for) 993 series car but by then Porsche had already contacted the Japanese to come in and show them how to produce cars for less money and that was the beginning of the end for the "classic 911's" which ended with the 993's.

 

Sad indeed.

I remember a local dealer in Los Angeles boasting about how he had 5 clients declined by PFS this week for brand new 911s as if that's something to be proud of

With thousands of vehicles sitting on dealer lots collecting dust, PFS declining deals left and right, the state of the economy, PAG VW investments + games, things are certainly not looking good for PAG.

 

Could it be that those prospective clients were too high a financial risk? Financial institutions must qualify prospective customers using appropriate guidelines. Remember the sub-prime fiasco?

 

Of course, who doesn't remember the sub-prime fiasco...

However, from hearing my dealer talk about these customers, one was supposedly a 20+ year aerospace employee with full proof of income, clean credit and etc. I don't know about the others but I was just dumbfounded as to why PFS would deny such an individual?

It makes zero sense but you're right, it's because of these "appropriate guidelines" that PFS employees simply stare at a screen and if the all-mighty computer says no, they say no as well. There's no personal touch, no "let's take a look and see if these are actually potential customers, people who want to give us their business."

I wrote in another thread that this same guy went an leased a brand new M6 from BMWFS --- this is purely a $100k loss to Porsche, and I'm sure it happens left and right if I randomly heard about it.

I could be wrong, but would anyone lease a car that they cannot afford? Especially in today's economy, you would have to be doing really well to make a 3 year commitment to a high priced vehicle - either that or you're an idiot

Bottom line: if you can afford a $xxxx / month car, and can prove your financials - it shouldn't even be a question. It's different for higher sum loans (such as mortgages) as those require 15-30 year commitments and are usually for amounts upwards of $500,000. However, and in my humble opinion, PFS and other lenders should be extending the red carpet for any potential customers. Maybe it's just PFS, I don't know, but when you look at the competition such as BMW, MB, Audi, etc. They are even giving incentives to customers for their business. PFS, well, "thanks, but no thanks for your business."

Just my $0.02...

 

From what i understand Porsche leasing has always stood firm on making sure those driving their cars qualify . Some competitors have not been as strict .

The Porsche 911 is avery desired car and for some who wanted this car for 20 years it's easy to get in too deep .

Some of the competition has not been as careful. Here's a story of a woman on disability who leased an M6 and blamed it on the dealership .
http://cbs5.com/local/auto.loan.defaults.2.645976.html

Quoted from article ---
"That's because the monthly lease payment was $1,300. It ate up half her income which was a $2,500 disability check. "I made a mistake by driving off with the car. I thought my situation would change. I thought I'd be able to go back to work soon and make my usual salary"

 

Front page of the Financial Times this morning...

http://www.ft.com/cms/s/0/a4452134-4...44feabdc0.html

 

Wait, are we suppose to feel sorry for this girl? I don't.

 

Great article, pretty much explained everything you needed to know. I hope that Porsche and VW can reach a reasonable decision that works out for both of them (especially for Porsche )

 

Precisely and that's my point . No one will "feel sorry for" the person who falls in love with a Porsche and leases it getting in over his head financially .

That's why Porsche has strict criteria for approval to lease a car .

 

Thanks: Great Article. Years ago Der Spiegel impressed me as Germany's National Enquirer, so I the discounted their article when it came out a few days ago. The FT nicely clarifies the issue.