Early days of Porsche in China

The early days of Porsche in mainland China, were preceded by its presence in Hong Kong, which dates back to 1955. A partnership between Porsche and the Jebsen group was responsible for the success in that region. The Jebsen Motors unit is said to be one of the largest dealers of

Porsche worldwide, according to a news article by PR Newswire Asia (Jebsen group celebrates 60th anniversary of partnership with porsche in hong kong 2015). The Jebsen Group has made success with Porsche in mainland China and Hong Kong.

They have a focus on marketing and distribution, but also with a deep understanding about mainland China, with a long presence in the region, also according to the PR Newswire Asia article (Jebsen group celebrates 60th anniversary of partnership with porsche in hong kong, 2015). From this information it can also be correlated with the discussion from the first chapter where the information on the selected market is a crucial step, such as the market research. Therefore, having a partner with a deep understanding about the local market in which is being targeted by a foreign company is crucial, and the case with Porsche and Jebsen proves to be a successful one.

One of the characters who had been deeply involved in Porsche’s initial presence in Hong Kong and later on, in mainland China, is Hans Michael Jebsen, as explained by Coughlan (2011) on the Christophorus magazine. Mr. Jebsen has been the Jebsen &

Co. Chairman since 2000 until nowadays - 2021. According to Coughlan (2011):

Jebsen & Co. is also the largest Porsche Centre operator in the world, having first brought the brand to China with the license to sell Porsche cars in Hong Kong in 1955. A little over a decade ago, Hans Michael Jebsen was a driving force in bringing the world’s most illustrious sports car marque to Mainland China.

(Coughlan, 2011, para. 2).

It is also important to mention that, when multinational enterprises (MNEs) are considering entering in foreign markets, some of the incurred factors are “costs”, or putting it another way, some limitations and investment required that the MNEs might face. As Hymer (1976, as cited in Chen, H. et al, 2006, p. 637) explains, such costs can be related to the inexperience or unfamiliarity with that new foreign environment.

In this way, it can also be assumed that in the beginning of Porsche operations within mainland China, some market conditions were unfamiliar to Porsche, but Porsche entrance into this market benefited from the knowledge possessed by the Jebsen group, which was previously operating in Hong Kong, and also for being a company with a deep understanding about the local conditions and characteristics. Two other types of “costs” related to foreign market entrance, as explained by the same author are, first, how some customers, government bodies and agencies, suppliers, etc. can create some discrimination with the new enterprise coming into the market. Second, it is a type of cost that is linked to the geographical expansion of operations, so in this case, the extra costs related to its international operations (Hymer, 1976, as cited in Chen, H. et al, 2006, p. 637).

As an overview of the beginning of Porsche presence in the region, without entering the political discussion about mainland China, Hong Kong and Macau, the operations in Hong Kong therefore started in 1955, with the Porsche Centre Hong Kong. In mainland China, it started in 2001, and in Macau, it started in 2005, where the Porsche Centre Macau was opened, as indicated by PR Newswire Asia (Jebsen group celebrates 60th anniversary of partnership with porsche in hong kong, 2015).

Entering mainland China in 2001, certainly benefited from the “head start” in which Porsche had previously in Hong Kong, as Mr. Hans Michael Jebsen says on an interview. According to Mr. Jebsen’s own words, “Hong Kong has been a window to the world, for the Chinese mainland” (Porsche (China) Motors Ltd, 2021, March 25, 02:48–03:38). That was also the stage when the Jebsen group obtained the “first

license to have a showroom in probably Beijing’s most prestigious building. Most prestigious club. The Chang An club, on Chang’an avenue” as Mr. Jebsen explained with his own words (Porsche (China) Motors Ltd, 2021, March 25, 02:48–03:18).

Therefore, with additional contributions and findings from Mosca & Re (2014), it can be concluded that the way how Porsche entered the territory of mainland China, was through the indirect export method, using an intermediary responsible for importing and distribution of Porsche cars in mainland China (Mosca & Re, 2014).

As it has been described, the partnership existent was with the Jebsen group, which was already established in the region. In this case, the Jebsen Motors division was the intermediary who brought Porsche to mainland China, when the first license was obtained, allowing to have the showroom in Beijing, as Mr. Jebsen mentioned on the interview.

The First Porsche Centre in mainland China was opened in Beijing, in 2001. In 2003 another Porsche office was opened in Shanghai. On an interview to the Christophorus magazine about Porsche’s “early days” in China, Mark Bishop and Lars Petersen – both senior executives, describes some details about that period. Mr. Petersen mentions that in the Shanghai office, the team started with 12 people, mixing newly employees with others who were working previously in Hong Kong. Petersen also explains that the training was difficult in that moment, as in the Chinese market, sports cars were not present, so the training of personnel was also one of the challenges at the initial operations. It was a period where the brand awareness was rather low, since most of the population would not show interest or the “need” of having a Porsche car.

One of the important steps taken by Mr. Petersen and his team was to create publicity about the brand, such as driving events around the country and other activities in order to show the Chinese population about the new brand in the market, as he had the idea of putting Porsche cars together in front of places like restaurants and getting some feedback (Holland, Bishop & Petersen, 2011).

Mark Bishop also attracted initial signs of success to Porsche expansion in China, as he already had previous experience in the Middle East where he developed Porsche operations (Holland, Bishop & Petersen, 2011). By leading successful strategies in the brand initial steps in China under the Bishop’s command, Porsche AG in Stuttgart saw that as an opportunity and enabled an increase in marketing investments, targeting at increasing the brand visibility (Holland, Bishop & Petersen, 2011).