Porsche subscription model is working and it’s attracting younger drivers

Excerpts from the article by Kellie Ell on CNBC

Porsche subscription model is working and it’s attracting younger drivers

Porsche Passport, the luxury car brand's subscription service that began in Atlanta last November, is attracting younger-than-expected drivers to the 87-year-old legacy company.

"We engage people with a brand that they usually wouldn't," Klaus Zellmer, CEO of Porsche North America, told CNBC's Phil LeBeau while in New York City for the 2018 New York International Auto Show.

"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," Zellmer said.

Porsche Passport, which provides subscribers with access to Porsche vehicles via a mobile app, is currently only available in Atlanta, home to Porsche's North American operation, as well as Clutch Technologies, the company hosting the app.

The month-to-month subscription gives customers two price options: A flat fee of $2,000 or $3,000. The subscription includes a $500 activation fee and credit check, and covers vehicle tax and registration, insurance, unlimited mileage and maintenance. Smartphone users can download the app and begin using the same day or schedule future rides. 

The program may be part of what's giving the company a boost in an otherwise grim industry. While U.S. new vehicle sales fell 2 percent in 2017, Porsche's sales in the U.S. had its eighth consecutive year of growth. The company's overall value increased nearly 42 percent, as market cap shot up to $24.457 billion this month, compared with $17.26 billion last March.

Zellmer said the growth can be attributed to many things, including tax reform and modern lifestyle habits.

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