If you could have to choose the a car which really encapsulates the strength, glamour, and thrill that people will feel about luxury vehicles, you wouldn’t find a better applicant than that of the Porsche 911. And what’s even more spectacular is that this is the scenario for even more than fifty years.
That’s why, we’ll be exploring the history of one of Germany’s most renowned car brands, Porsche.
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History of Porsche An Engineer Dream
History of Porsche. Our story begins in 1875 in Maffersdorf, as mall town in the Austrian Empire that is now part of the Czech Republic. That’s the birthplace of Ferdinand Porsche, a shy and knowledgeable child with such an ambition for engineering. As a teenager, he would probably have spent much of his days in his dad’s service center, trying to learn the ins and outs of vehicle mechanics whilst also going to college at night. His dedication gave him many engineering opportunities at regional businesses, and he had developed his first vehicle, the Porsche P1, by the time he was 23.
Basically, it was really a carriage operating on electric engines. It was expected to set speed records, but it has been sort of slowed down by the 2 tons of lead-acid batteries it had. With a gasoline engine, Ferdinand would later develop it, making the first ever electric vehicle, the Lohner-Porsche Mixte Hybrid. This could exceed 37 mph and it smashed the record for Austrian speed and won several races.
Porsche was finally enlisted into the army, where there is none other than Archduke Franz Ferdinand worked as a chauffeur for him. Fortunately, long before the other chauffeur assassinated the Archduke and his wife, kicking off the First World War, he was back to engineering vehicles. Porsche traveled to Stuttgart in the early 1920s, where Daimler employed him as a technical officer. There with an unparalleled top speed of 120 mph, he designed the Mercedes-Benz SSK, undoubtedly the best racing car of its age.
Launching of Porsche
History of Porsche. Porsche had saved up enough money by 1931 to launch a company of its own. He is now one of Germany’s most successful engineers, but his company didn’t really take off. The German economy was still in shambles in 1933 and very few people could afford cars. This is where Hitler came in.
On January 30 that year, he became the Chancellor of Germany, and only a few days later, at the Berlin Auto Show, he declared the beginning of the new age for cars. He needed a car which might suit a family of five, begin in the cold and to be very fuel efficient for every German resident. All he intended, in reality, was an everyone’s car; a Volkswagen, maybe you can.
Of course the idea was incredibly ambitious, that is why the finest engineers he had including Ferdinand Porsche, were hired by Hitler. In 1934, he started to focus on what would finally become the Beetle, subsequently becoming a member of the Nazi Party and even the SS. Hitler announced a state-owned Porsche car factory in 1938 that was to be operated by the recently formed Volkswagen group.
Phase of World War 2
History of Porsche. During World War 2, Porsche was recruited for military projects like the Elephant heavy tank destroyer. Because of that, and his SS membership, Porsche was arrested and imprisoned for war crimes in 1945. He was released several years later, however his son, Ferry Porsche, had taken over the ownership of the corporation at that time. He decided to design cars featuring the name Porsche on them, and so he built the Porsche 356 in 1948.
Its success did not really take off until it won the Le Mans race in 1951, during which this became the flagship model of Porsche. About 76,000 cars had been manufactured by 1965, when manufacturing eventually stopped. It’s easy to see why these reports suggest that two thirds of all Porsche ever manufactured are on the track, which would be partly the reason why the Porsche brand has survived so long. Their name was based on sports cars, that’s why when Porsche wanted to build an SUV in 2002, everyone lost their minds.
Volkswagen & Porsche
History of Porsche. As everybody already knows that Volkswagen owns Porsche, but it’s actually much more interesting. Volkswagen became quite popular in the decades following World War 2, greatly outshining Porsche and manufacturing 60 times as many vehicles. One such day in 2005, the two Porsche officials agreed on as they needed to buy Volkswagen for whatever reason. Volkswagen has been of course, much larger than Porsche could actually afford, but they worked out a smart and practically legitimate method around it.
Their first attempt was to purchase call options on stock of Volkswagen. Today, if you’re not sure of how call options operate, they essentially gain cash as the price of the stock rises. So, once the executives had enough options,they started buying the stock itself, lifting its price, earning money from the options, and using that money to buy even more stock. They also resumed their project for three years, and by October 2008, Porsche owned 74.1 per cent of Volkswagen.
Now according to German law, in order to gain access to Volkswagen’s billions in cash deposits, Porsche wanted to own 75 per cent. But Porsche had ran out of cash long ago and had purchased thousands of shares by borrowing money. By that point the stock manipulation was so bad that Volkswagen stock had quadrupled in price, making it briefly the largest company in the world.
Then, the Great Recession happened. All of the banks wanted their money back, yet Porsche was practically destroyed and soon forced into bankruptcy. The two executives, though, had planned for this. In 2007, they set up a joint venture for Porsche, that owns 100% of the production sector, but got an additional level of legal protections. This maintained the automotive industry going, but, sadly, because when Porsche holding companies declared bankruptcy, that was Volkswagen who saved them.
Volkswagen bought the entire Porsche production business, which provided the Porsche holding company with enough capital to repay its loans and maintain a 30.8 per cent interest in Volkswagen. The best thing, though, would be that the two executives accountable for the debacle wound up leaving scot-free even with millions in cash.