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As we all know, with the rapid rise of China's automobile industry, more and more multinational brands are now localized, and it has also become the world's largest single automobile market. Despite this, there are still many imported brands that refuse to build factories in China. Recently, it has been reported that Porsche will build a factory in Malaysia.

Porsche is planning to form a joint venture with Inokom Corp, a subsidiary of Malaysia's Sime Darby group, to build the assembly plant in northern Malaysia's Kedah state, which will serve as Porsche's Southeast Asian hub in the future, Malaysian media reported, citing people familiar with the matter.

It is worth noting that this will also be Porsche's first overseas factory outside Germany. According to the data, the Porsche brand currently produces cars only in Germany, with Stuttgart and Leipzig factories. The Stuttgart plant produces the 911, Boxster and Cayman models, while the Leipzig plant produces Porsche Cayenne, panamera and Macan models.

The report pointed out that Porsche chose to set up an assembly plant in Malaysia this time because Porsche's construction has a boost to Malaysia's investment, because Malaysia lags behind Indonesia and Thailand in attracting overseas investment. At the same time, compared with the import of complete vehicles, the import tariffs for assembling vehicles in Malaysia are lower and lower costs can be achieved. Mercedes Benz, BMW and Volvo already have factories in Malaysia.

In response to this news, the media also quoted Christian Weiss, Deputy Director of Public Relations at Porsche, as saying: "The Southeast Asian market has great potential and the company is constantly studying various options for further growth in this market."

As a multinational luxury brand, Porsche has captured the favor of many domestic consumers through pure original imports, which also helps the Chinese market become Porsche's largest single market. In this context, Porsche has been rumored to be made in China, but it has also been denied by Porsche officials.

The most recent was in September this year, where Porsche officials once again made a formal response at last year's Beijing auto show. "We will continue to evaluate the situation, but there is no domestic plan yet," Yan Boyu, president and CEO of Porsche China, told the media.

Yan Boyu stressed that when we consider any problem, the starting point is always how to better serve customers. And Porsche will continue to pay attention to localization issues, but so far has not decided on localization. First, Chinese customers who buy Porsche will prefer sports cars with German craftsmanship; second, Porsche's overall production volume is small, Porsche factory capacity can meet market demand, and it is not cost-effective to build another factory.

This situation is actually the same as that of another best-selling luxury brand in China. Even though the Chinese market is its largest single market, Lexus officials have always stressed that there are no plans to build factories in China. And think Lexus as a relatively young luxury brand in China, the sales volume in the Chinese market is not large, need to wait until the sales volume gradually increases and stabilizes to the need for domestic production before considering to build a factory in China. After all, there are many factors to consider in realizing domestic production. It is not that Lexus does not want to make domestic products, but Lexus does not need domestic products temporarily. According to the data, India has become Lexus 'third manufacturing base.

At present, the realization of Chinese-made luxury brands have included Mercedes, BMW, Audi, Cadillac, Volvo, Infiniti, Acura and Lincoln and many other brands, but the above brands are all in the Chinese market through "price reduction" competition in the Chinese market, and not domestic Lexus and Porsche, has been through limited production capacity to maintain "price increase" marketing, there is no doubt that there is a big difference. This also reflects that the sales strategy of pure original imports has more market in the Chinese market.

According to Porsche's latest data, in 2020, Porsche brand delivered 89,000 vehicles in China, up 2.6% year-on-year, accounting for 33% of Porsche brand sales throughout the year and continuing to rank as Porsche's largest single market in the world. Porsche 911 deliveries in 2020 increased by 70 per cent year-on-year, while Porsche 718 deliveries increased by 50 per cent.

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