Porsche profits out of control!
01-23-2007, 02:31 PM
#11
yeah, exclusive
the high price keeps these from being as common as seeing an Audi or BMW (which is already considered an exclusive and prestigous vehicle by the majority of North America). On the streets and parking lots, everyone knows there are less P-cars than Audi's/BMW's (should be a 2.5 to 1 ratio). 90,116 Audi's were sold in 2006 alone. 11,897 in December '06 alone. 49,862 A4/S4 varients(Audi's best selling) were sold in 2006 versus Porsche's best selling (the 911) 12,702 (a 4 to 1 ratio).
Anyhow, when you get into the "money is no object" stratosphere of buyers you kind of expect each item to have a pretty fat profit margin. Most 911's have MSRP's of >US$90,000. +$105,000 is common place. The group of buyers looking for one of these is willing to shell out tens of thousands on options alone (as petty as you may think the option is, people with money want things their way). BTW, have you seen how much these buyers are also willing to spend on good wine,cigars, and restaurants?? It is fairly obvious that Porsche is doing enough to meet their clientelle's demands such that they can command a good profit. The question is 'why is Audi and BMW not able to command more profit per vehicle?'.
FYI for all, 36,000 Porsches sold in 2006.. comprised of:
89 GT's.
12,702 911's.. of which the breakdown includes GT3's, Turbos, Targas, Carreras (4,916), and the Cabrio variants (the surprising part being that 5,851 of the 911's are Cabrios.. making for a fatter profit margin since the soft top adds USD$10,000 to the MSRP).
11,141 Cayenne's.. of which there is the V6, S, Turbo, and Turbo S.
12,163 Cayman Coupes, and Boxsters
Anyhow, when you get into the "money is no object" stratosphere of buyers you kind of expect each item to have a pretty fat profit margin. Most 911's have MSRP's of >US$90,000. +$105,000 is common place. The group of buyers looking for one of these is willing to shell out tens of thousands on options alone (as petty as you may think the option is, people with money want things their way). BTW, have you seen how much these buyers are also willing to spend on good wine,cigars, and restaurants?? It is fairly obvious that Porsche is doing enough to meet their clientelle's demands such that they can command a good profit. The question is 'why is Audi and BMW not able to command more profit per vehicle?'.
FYI for all, 36,000 Porsches sold in 2006.. comprised of:
89 GT's.
12,702 911's.. of which the breakdown includes GT3's, Turbos, Targas, Carreras (4,916), and the Cabrio variants (the surprising part being that 5,851 of the 911's are Cabrios.. making for a fatter profit margin since the soft top adds USD$10,000 to the MSRP).
11,141 Cayenne's.. of which there is the V6, S, Turbo, and Turbo S.
12,163 Cayman Coupes, and Boxsters
01-23-2007, 05:55 PM
#13
it probably took Audi only 10 years to put out as many A4/S4 variants as porsche did in the 40 years
..the key difference is that most of those A4/S4's of the last 10 years are still daily drivers, while the 40 to 10 year old 911's are eventually going to be considered collectibles.. with a high interest in 1995 to 1997 911 Turbos (especially the S variant).
01-23-2007, 07:56 PM
#14
AudiWorld Uber User
Thread Starter
Audi also went through 3 engine/chassis changes in that time, not the same basic design
rehashed over and over.
I know to some people it's classic, but come on! Hans Ledwinka was doing the same design with Tatra back in the late 20's!!!! It's only because everybody else decided to package their cars differently, that Porsche has been able to keep the spin fresh. A Tatra 77 is a pretty classic car, and I think of a Porsche 911 varient as simply being an extension of that car, with very few substantial changes (air cooled flat engine in the back with a backbone chassis under a beetle shaped body). The Tatra and the Beetle which copied it, placed the air cooled horizontally opposed motor in the rear to centralize the mechanical systems, so more space could be devoted to passengers and cargo. Think back to the 80's when Porsche created the 959. That was the last hurrah for a breakthrough of the design. While Porsche has done a marvelous job with honing a primative family car into a sports car, that heritage means that ultimately in the larger sense it holds little more cachet than an S4. Unless you're a history buff;-)
As baby boomers pass, we'll probably see shift away from those cars as classics that get used, to antiques of a more limited worth - especially the ones that aren't unique in any particular way - and there are so many of them. The market will get saturated.
$200 for a leather covered fuse box panel, $400 for a leather armrest cover, or crested headrest, or $3K for a leather headliner, is just milking the consumer - and they obviously pay willingly. That makes it a club I'm not willing to join. Sales of Alfa Romeo are not quite double those of Porsche, they have a race history that matches Porsche, and yet they don't make $12,000 per car via painted dash trim. On one hand I admire Porsche's ability to sell the image, and on the other I'm apalled that people fall for it to the tune of such a large amount.
I know to some people it's classic, but come on! Hans Ledwinka was doing the same design with Tatra back in the late 20's!!!! It's only because everybody else decided to package their cars differently, that Porsche has been able to keep the spin fresh. A Tatra 77 is a pretty classic car, and I think of a Porsche 911 varient as simply being an extension of that car, with very few substantial changes (air cooled flat engine in the back with a backbone chassis under a beetle shaped body). The Tatra and the Beetle which copied it, placed the air cooled horizontally opposed motor in the rear to centralize the mechanical systems, so more space could be devoted to passengers and cargo. Think back to the 80's when Porsche created the 959. That was the last hurrah for a breakthrough of the design. While Porsche has done a marvelous job with honing a primative family car into a sports car, that heritage means that ultimately in the larger sense it holds little more cachet than an S4. Unless you're a history buff;-)
As baby boomers pass, we'll probably see shift away from those cars as classics that get used, to antiques of a more limited worth - especially the ones that aren't unique in any particular way - and there are so many of them. The market will get saturated.
$200 for a leather covered fuse box panel, $400 for a leather armrest cover, or crested headrest, or $3K for a leather headliner, is just milking the consumer - and they obviously pay willingly. That makes it a club I'm not willing to join. Sales of Alfa Romeo are not quite double those of Porsche, they have a race history that matches Porsche, and yet they don't make $12,000 per car via painted dash trim. On one hand I admire Porsche's ability to sell the image, and on the other I'm apalled that people fall for it to the tune of such a large amount.
01-24-2007, 07:15 AM
#15
I think you're a bit too concerned about $$. I don't think you understand the high end market.
If someone produces something that you want.. but they make a large profit.. that isn't going to stop you from buying that item. If you're going to take the cost contious approach, you'll compare the cost of that item to the next available item that you would consider a substitute. In Porsches case, they've got a product (image included) that doesn't have enough substitutes to constitute them dropping the price. Why be appalled that Porsche can profit from supplying this product?
Amazingly, people with money aren't looking for latest/greatest lowest price.. there's going to be a certain value that is placed on historic significance. While the A4 went through 3 engines/chassis, it isn't really considered interesting. The 911 being a rear engine, with a legacy of being a great car that inspired all sorts of kids as being fun/cool/unique is interesting.. and that stays in the mind of those kids who have grown up to successful professionals (ones that don't need the utility of 4 doors). Perhaps I should ask what your opinion is on those that spend thousands on new watches that use traditional/classic technology to keep time.. are you appalled at the profit made on each watch?
Amazingly, people with money aren't looking for latest/greatest lowest price.. there's going to be a certain value that is placed on historic significance. While the A4 went through 3 engines/chassis, it isn't really considered interesting. The 911 being a rear engine, with a legacy of being a great car that inspired all sorts of kids as being fun/cool/unique is interesting.. and that stays in the mind of those kids who have grown up to successful professionals (ones that don't need the utility of 4 doors). Perhaps I should ask what your opinion is on those that spend thousands on new watches that use traditional/classic technology to keep time.. are you appalled at the profit made on each watch?
01-24-2007, 09:50 AM
#18
"One-off and extraordinary effects result in distorted figure"
It seems that when B&D tried to figure out the profit per vehicle, they neglected to take into account that Porsche's profit numbers included profit from sale of business, one time tax effects, and hedging transactions.
The profit per vehicle sold is on average lower than stated ($28,000) in the supposed investigation.<ul><li><a href="http://www.porsche.com/usa/aboutporsche/pressreleases/pag/?pool=international-de&id=2007-01-23">Incomplete info probably led to the incorrect 'profit' per vehicle</a></li></ul>
The profit per vehicle sold is on average lower than stated ($28,000) in the supposed investigation.<ul><li><a href="http://www.porsche.com/usa/aboutporsche/pressreleases/pag/?pool=international-de&id=2007-01-23">Incomplete info probably led to the incorrect 'profit' per vehicle</a></li></ul>
01-24-2007, 10:39 AM
#20
AudiWorld Uber User
Thread Starter
Sorry, but I just don't see the value of paying through the nose for a retro-mobile.
Just thinking of what Porsche could do with that money from a development standpoint rather than rehash the same old thing with a few tweaks to the wrapper now and then, along with offering rebadged VWs at a considerable mark-up.
I think I may have some grasp of the high end market and wasting money for thrills, since I own a prancing horse that happens to have the motor in the center, 5 valves per cylinder and of which about 11,000 were built in total. Come to think of it, most of the owners I know, have or had a 911 of some flavour, but have either moved up or use those cars as daily beaters
We did consider the (996) GT3, but after one long drive, it left us cold.
We have a little weekly gathering when weather is nice, and go for drives.
<img src="http://homepage.mac.com/verdegrrl/.Pictures/GermansvsItalians.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/Sea-Ranch/sled-abed.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/Hysterics-06/Ferraris/IMG_4505.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/Hysterics-06/People/IMG_4554.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/3-partners.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-1.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-2.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-3.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-4.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-5.jpg">
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<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-7.jpg">
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<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-9.jpg">
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I used to work in the jewllery industry and we did overhaul watches. The exclusive watches that actually have meticulously hand built innards and use expensive materials are cool. The newer watches that resemble old ones but use quartz movements while charging mechnical watch prices are a poor value IMHO.
I think I may have some grasp of the high end market and wasting money for thrills, since I own a prancing horse that happens to have the motor in the center, 5 valves per cylinder and of which about 11,000 were built in total. Come to think of it, most of the owners I know, have or had a 911 of some flavour, but have either moved up or use those cars as daily beaters
We did consider the (996) GT3, but after one long drive, it left us cold.We have a little weekly gathering when weather is nice, and go for drives.
<img src="http://homepage.mac.com/verdegrrl/.Pictures/GermansvsItalians.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/Sea-Ranch/sled-abed.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/Hysterics-06/Ferraris/IMG_4505.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/Hysterics-06/People/IMG_4554.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/3-partners.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-1.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-2.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-3.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-4.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-5.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-6.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-7.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-8.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-9.jpg">
<img src="http://homepage.mac.com/verdegrrl/.Pictures/car-show/SR-10.jpg">
I used to work in the jewllery industry and we did overhaul watches. The exclusive watches that actually have meticulously hand built innards and use expensive materials are cool. The newer watches that resemble old ones but use quartz movements while charging mechnical watch prices are a poor value IMHO.