Porsche 2005 Annual Report Download - page 16

14 Management Report
year, took effect as of the second half of the fiscal year 2005/06.
Thus only the sales recorded up until this date – a figure of
150 million Euro – were included in this fiscal year.
Once again, the majority of group sales were recorded in the
vehicles division. This figure amounted to 6.733 billion Euro
(excluding CTS) and represents growth of 14.1 percent.
The financial services entities recorded sales of 389.5 million
Euro, mainly from leases, loans and credit cards. Porsche AG
accounted for 6.12 billion Euro of total sales.
After the end of the fiscal year, Porsche Engineering Services
(PES) in Wilmington, Delaware, was sold to Magna International
Inc., Aurora, Ontario, Canada. Until September 2006, PES
belonged to Porsche Engineering Group GmbH in Weissach and
primarily processed development contracts for the American
market. Since PES was taken over by Magna International, all
of Porsche’s development projects for external customers
worldwide have been centralized in Weissach.
Increased Production
The number of vehicles produced rose considerably during the
reporting year. Including the 16,297 Cayman and Cayman S
models assembled in Finland and the total of 14,383 Boxster
and Boxster S models, 102,602 vehicles rolled off the pro-
duction lines. This is equivalent to growth of 12.8 percent in
a year-on-year comparison.
A significantly higher number of vehicles were manufactured,
especially with respect to the new sports car generations. Pro-
duction of the 911 in Stuttgart-Zuffenhausen was stepped up
by 27.6 percent to 36,504 units. This already included 2,150
vehicles from the new 911 Turbo range, sales of which started in
June 2006. On account of the high demand for the models from
the 911 and Boxster series, almost all Boxster and Cayman pro-
duction was carried out by our partner in Finland. Production of
the Cayenne in the Leipzig plant fell by 14.9 percent to 35,128
vehicles in connection with the product life cycle. In addition to
the sporty all-terrain vehicle, 290 Carrera GTs were manufactured
in Leipzig in the reporting year (previous year: 715) before pro-
duction of the model ceased in May 2006.
High Development Costs
The expenses for internal developments continued at a high
level in the reporting year. On the one hand, development work
was downsized after the market launch of the new sports car
generation spread over the two previous fiscal years. On the
other hand, expenses were incurred for new model versions
such as the 911 GT3, the 911 Turbo and the 911 Targa. There
were also expenses for the Cayman and Cayman S as well as
for the development of the new Cayenne. The sporty all-terrain
vehicle will be launched on the global markets gradually from
the beginning of 2007. In addition, the first development costs
for the four-door sport coupe Panamera have already been
incurred.
More Jobs Created
The Porsche Group once again created jobs in the fiscal year
2005/06. Adjusted for the sale of CTS Fahrzeug-Dachsysteme
GmbH, the headcount rose by 3.8 percent to 11,384 as of
the cut-off date. CTS Fahrzeug-Dachsysteme GmbH had 910
employees in the previous year and has now been sold. Most
of the new jobs created in the Porsche Group during the report-
ing year were in the area of research and development and
in the services sector. On a standalone basis, the headcount
of Porsche AG totaled 8,257 employees as of the cut-off date
(7,995 in the previous year).
Directly after the end of the fiscal year, the headcount of
the Porsche Group was reduced by a further 126 to 11,258
employees on account of the sale of Porsche Engineering
Services (PES) in Wilmington, Delaware, in September 2006.
Increased Productivity
Porsche has been continuously testing its processes for
years now. Process optimization is a cornerstone on which
company policy and the agreed-upon objectives of the exe-
cutives are based. Activities to optimize business processes
are initiated and implemented primarily using the Porsche
improvement process (PVP) and Porsche process optimization
(PPO). The annual potential for improvement ranges from
three to six percent.