Porsche: Sales, Marketing, and Financial News
01-22-2007, 03:29 PM
#43
Senior Moderator
Porsche earnings per car sold...
Wow. 
From Leftlanenews...
From Leftlanenews...
A new study has found that German sports car maker Porsche earns an incredible average of $28,000 in profit on every vehicle it sells. The figure — printed in Germany's Welt am Sonntag newspaper, citing a study by B&D Forecast — dwarfs the per-car earnings of virtually any other automaker.
Comparatively, luxury and sports car maker BMW makes about $3,200 per car. Audi nets a less impressive $1,580, and Chrysler and Volkswagen earn just $900 and $400, respectively.
Comparatively, luxury and sports car maker BMW makes about $3,200 per car. Audi nets a less impressive $1,580, and Chrysler and Volkswagen earn just $900 and $400, respectively.
01-22-2007, 03:48 PM
#45
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Without more information, this could mean nothing. It's always funny how some people say how something "costs" so much to make, yet they sell it for so much more and make such a big "profit". (it costs $0.10 to print a music CD and they sell them for $10! Newsflash: you ain't paying for the CD, you're paying for the music/information on it).
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
01-22-2007, 04:33 PM
#48
That has to be a typo. Maybe they're talking about a specific model? The GT? Or is the GT raking up so much for them that it offsets the other sales?
Either way, I still doubt it.
Either way, I still doubt it.
01-22-2007, 04:37 PM
#49
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Originally Posted by mrdeeno
Without more information, this could mean nothing. It's always funny how some people say how something "costs" so much to make, yet they sell it for so much more and make such a big "profit". (it costs $0.10 to print a music CD and they sell them for $10! Newsflash: you ain't paying for the CD, you're paying for the music/information on it).
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
01-22-2007, 05:46 PM
#50
Suzuka Master
I suspect that these costs are fully amortized and that they include all fixed, development, and promotional costs. If you don't think that Porsche makes that much go price a decently equipped Boxster S or a 911 and think in terms of what it would cost to make these cars. Either of these cars would probably cost less to make than an Acura RL, but they cost 50 - 80% more.
01-22-2007, 06:20 PM
#51
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Originally Posted by SpeedyV6
I suspect that these costs are fully amortized and that they include all fixed, development, and promotional costs. If you don't think that Porsche makes that much go price a decently equipped Boxster S or a 911 and think in terms of what it would cost to make these cars. Either of these cars would probably cost less to make than an Acura RL, but they cost 50 - 80% more.
Well, i'm not sure what to think given that the article doesn't give anything to back up or explain the numbers.
I doubt a base boxter of around $45k msrp, or even a boxter S, would get anywhere near the $28k profit average, and they sell a lot of those. So unless they are selling a lot of $100k+ cars and profiting MORE than $28k on every sale, I don't see how the "average" can be $28k. Not to mention the dealer profit that's not included in what Porsche profits.
01-22-2007, 06:21 PM
#52
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Its not like these are handbuilt cars nor have mahogany wood in them. Wouldnt surprise me in the least if this turned out to be true.
01-22-2007, 06:22 PM
#53
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Originally Posted by Black Tire
yeh ok....beating Toyota in profit/car is impossible.
Someone was high or something.
Someone was high or something.
Toyota however sells tens of millions of cars at a respectable profit.
01-22-2007, 06:56 PM
#54
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Originally Posted by Ken1997TL
Profit per car? Its not that hard to beat Toyota.
Toyota however sells tens of millions of cars at a respectable profit.
Toyota however sells tens of millions of cars at a respectable profit.
01-22-2007, 07:01 PM
#55
Suzuka Master
Originally Posted by mrdeeno
Well, i'm not sure what to think given that the article doesn't give anything to back up or explain the numbers.
I doubt a base boxter of around $45k msrp, or even a boxter S, would get anywhere near the $28k profit average, and they sell a lot of those. So unless they are selling a lot of $100k+ cars and profiting MORE than $28k on every sale, I don't see how the "average" can be $28k. Not to mention the dealer profit that's not included in what Porsche profits.
I doubt a base boxter of around $45k msrp, or even a boxter S, would get anywhere near the $28k profit average, and they sell a lot of those. So unless they are selling a lot of $100k+ cars and profiting MORE than $28k on every sale, I don't see how the "average" can be $28k. Not to mention the dealer profit that's not included in what Porsche profits.
I also shopped some used air-cooled 911's and was amazed to see how many Porsches with 40 - 60K miles on them had rebuilt engines in them, especially the Turbos. Porsches may seem reliable in surveys because most are immaculately maintained and driven something like 7K miles per year, but they are not necessarily better built than Japanese cars.
01-22-2007, 11:24 PM
#57
Damn that's awesome for Porsche.
01-22-2007, 11:30 PM
#58
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Its believable, its been known that Porsche makes the most profit per car. And as Ken said, they arent handbuilt yet they are priced at a premium. The high profits make perfect sense to me.
01-23-2007, 01:26 AM
#59
Originally Posted by mrdeeno
Without more information, this could mean nothing. It's always funny how some people say how something "costs" so much to make, yet they sell it for so much more and make such a big "profit". (it costs $0.10 to print a music CD and they sell them for $10! Newsflash: you ain't paying for the CD, you're paying for the music/information on it).
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
01-23-2007, 07:08 AM
#60
Originally Posted by mrdeeno
Without more information, this could mean nothing. It's always funny how some people say how something "costs" so much to make, yet they sell it for so much more and make such a big "profit". (it costs $0.10 to print a music CD and they sell them for $10! Newsflash: you ain't paying for the CD, you're paying for the music/information on it).
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
01-23-2007, 07:17 AM
#61
Senior Moderator
Originally Posted by mrdeeno
Without more information, this could mean nothing. It's always funny how some people say how something "costs" so much to make, yet they sell it for so much more and make such a big "profit". (it costs $0.10 to print a music CD and they sell them for $10! Newsflash: you ain't paying for the CD, you're paying for the music/information on it).
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
Sure, it can cost $20k in labor and parts to make a car that sells at $48k ($28k "profit"). but someone has to pay the engineers that engineered the car, the managers that managed the engineers that engineered the car, the secretaries that take calls for the managers that manage the engineers that engineered the car, the costs it took to take out magazine ads to sell the car, the costs it took to take out TV ads to sell the car, the costs it took to do mandated safety tests and certifications in order to be allowed to sell the car, costs for taxes/duties, etc. etc.
So unless they go into detail if this is the OVERALL profit on the sale (sale price minus all costs involved), or just the last stage (sales price minus manufacturing costs), it doesn't really mean much. But just saying "$28k profit!" is more newsworthy though.
Whatever the number means, the point of the article I think is to point out how much they make per car compared to other manufactuerers. I'd hope that whatever criteria was used to come to this number for Porsche was also used for everyone else.
01-23-2007, 09:22 AM
#62
Got da Internet Goin Nutz
I think it is very possible, simply because Porsche doens't have a shit load of models out there. If, for instance, there were an Automaker 4 years ago that sold nothing but SUVs (known to have a rediculous markup) that automaker would have been right up there with porshce. But the truth is that most autmakers have a shit load of models with widely varying profit margins. While porsche has a limited amount of models that all have high profit margins, hence none to bring the average down.
As well, most car makers have a shit load of cars to move so profit made over a shit load of cars makes the company money. However, Porshce keeps the inventory very low and makes big money on each car so they don't have to produce a shit load of cars.
As well, most car makers have a shit load of cars to move so profit made over a shit load of cars makes the company money. However, Porshce keeps the inventory very low and makes big money on each car so they don't have to produce a shit load of cars.
01-23-2007, 10:58 AM
#64
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Originally Posted by ludachrisvt
By profit they mean just that, the PROFIT. This is after materials and overhead. The rest goes to what is called the bank.
Such as the people who go around thinking the difference between the $10 sales price of a CD and the cost of $0.10 to print it is all profit.
01-23-2007, 11:16 AM
#65
Well, if we logically review Porsche as a company...
1. It's design fundamentals haven't changed much since the company was started. The cars use the same basic shape which helps keep their design costs down.
2. The number of engines in their stable are rather few. They have the small 2.7L, then the 3.4L and the 3.6L. Having fewer motors means less money spent on tooling and dies and sharing parts between the motors probably helps keep their costs low.
3. Interiors on most Porsches share parts. They all look pretty similar and their built quality and material quality isn't exactly on the level of $100k cars from MB, BMW, or Lexus.
4. Porsche's platforms are limited. They have used the same basic fundamental architecture for their cars and their entire line-up of 911 models shares the same platform, regardless of the variant. We have already seen that platform sharing saves a lot of money for manufacturers. The only new platforms that Porsche has introduced in recent history have been the Boxster/Cayman platform and the Cayenne, which was co-developed with VW, who probably footed a much larger portion of the bill.
I think looking at these points, and considering that Porsche's big icon is the 911, which carries a price tag in the $90k range, I wouldn't be surprised if their average profit was near what this article is claiming. Especially when you think about how little it costs for them to produce a model like the GT3, which actually carries less equipment, from the regular 911 and can charge a ridiculous premium for its rarity, the number seems more and more feasible.
1. It's design fundamentals haven't changed much since the company was started. The cars use the same basic shape which helps keep their design costs down.
2. The number of engines in their stable are rather few. They have the small 2.7L, then the 3.4L and the 3.6L. Having fewer motors means less money spent on tooling and dies and sharing parts between the motors probably helps keep their costs low.
3. Interiors on most Porsches share parts. They all look pretty similar and their built quality and material quality isn't exactly on the level of $100k cars from MB, BMW, or Lexus.
4. Porsche's platforms are limited. They have used the same basic fundamental architecture for their cars and their entire line-up of 911 models shares the same platform, regardless of the variant. We have already seen that platform sharing saves a lot of money for manufacturers. The only new platforms that Porsche has introduced in recent history have been the Boxster/Cayman platform and the Cayenne, which was co-developed with VW, who probably footed a much larger portion of the bill.
I think looking at these points, and considering that Porsche's big icon is the 911, which carries a price tag in the $90k range, I wouldn't be surprised if their average profit was near what this article is claiming. Especially when you think about how little it costs for them to produce a model like the GT3, which actually carries less equipment, from the regular 911 and can charge a ridiculous premium for its rarity, the number seems more and more feasible.
01-23-2007, 11:42 AM
#66
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I don't doubt that at all. I read from somewhere very reliable mag. (MOney, time, or etc) about a few years back that Porsche is one of the most profittable auto company on the planet. Just think about it and take a look at today's 911 and previous 911, they are about 90% identical except just small improvement here and there. They don't have to spend tons of money to develope new engine, design new chassis, create new style, or pour in tons of money to do marketings. Their engineering team is much small than like say Toyota's, yet their vehicle price is about 5x a camry. It is not hard to believe that they actually profit about 28k per car.
01-23-2007, 12:11 PM
#67
Originally Posted by runnerX
I don't doubt that at all. I read from somewhere very reliable mag. (MOney, time, or etc) about a few years back that Porsche is one of the most profittable auto company on the planet. Just think about it and take a look at today's 911 and previous 911, they are about 90% identical except just small improvement here and there. They don't have to spend tons of money to develope new engine, design new chassis, create new style, or pour in tons of money to do marketings. Their engineering team is much small than like say Toyota's, yet their vehicle price is about 5x a camry. It is not hard to believe that they actually profit about 28k per car.
And as Ken said, they're not hand-made so their high prices aren't adversely affected by any labor costs.
01-23-2007, 12:16 PM
#68
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Originally Posted by SpeedyV6
I suspect that these costs are fully amortized and that they include all fixed, development, and promotional costs. If you don't think that Porsche makes that much go price a decently equipped Boxster S or a 911 and think in terms of what it would cost to make these cars. Either of these cars would probably cost less to make than an Acura RL, but they cost 50 - 80% more.
We all know that Porshce is the most profitable automaker for years now. What a turnaround ah? So now we find out "by how much".
I believe the article because it gives comparable numbers for other automakers. And because I know the numbers for BMW and Chrysler are correct above, then I have to assume that Porsche's numbers are also correct.
If true, then once more, it's proven how overpriced Porsche vehicles are. However I did not need to know the above because I found out how "not worth buying" the Boxster S and the Cayman S were, when I drove both, back-to-back with the M3, the C6 and the CLK550.
I remember writing in my review that after driving the C6, the Porches felt like "little toy cars". And I drove a Chevy, imagine.
However, this also tells us about the marketing genious of the Porshce mgt. team. These guys have done an unbelievable job convincing people with money that their product is worth purchasing. That is not easy to do, even for limited production vehicles. Good job Porsche, you deserve your riches! Enjoy them while they last because as you turned around before, you could turn around again, only towards the wrong direction that time.
01-23-2007, 12:16 PM
#69
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Originally Posted by Ken1997TL
Its not like these are handbuilt cars nor have mahogany wood in them. Wouldnt surprise me in the least if this turned out to be true.
01-23-2007, 12:20 PM
#70
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Originally Posted by gavriil
I believe the article because it gives comparable numbers for other automakers. And because I know the numbers for BMW and Chrysler are correct above, then I have to assume that Porsche's numbers are also correct.
Exactly.
01-23-2007, 12:23 PM
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The article talks about earnings which means net income.
Net income = Gross income less expenses, including taxes and insurance, but before depreciation, additions to reserves or distribution of earnings.
Net income = Gross income less expenses, including taxes and insurance, but before depreciation, additions to reserves or distribution of earnings.
01-23-2007, 12:23 PM
#72
Originally Posted by Maximized
Go to a Porsche dealer and inquire about parts. This is hardly believable IMO when you factor in engineering, testing, more engineering, further testing, parts, equipment (you always have to re-tool), and the total assembly process. Then you have to factor in marketing, advertising, other business entities etc. etc. etc. Do they also factor in their racing programs? I can go on, but I think that's a good start.
01-23-2007, 12:25 PM
#73
Senior Moderator
How many cars does porche sell? The lower the volume, the more profit you need to make on each car. When you are selling millions of cars you can get away with a couple hundred bucks profit on each car.
01-23-2007, 12:27 PM
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Originally Posted by Black Tire
yeh ok....beating Toyota in profit/car is impossible.
Someone was high or something.
Someone was high or something.
No one is high. Profit per car. Per car. Look at the difference between how many cars Toyota sells as opposed to Porshce. Porsche looks like a butique marque compared to Toyota.
01-23-2007, 12:28 PM
#75
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Originally Posted by mrdeeno
Well, i'm not sure what to think given that the article doesn't give anything to back up or explain the numbers.
I doubt a base boxter of around $45k msrp, or even a boxter S, would get anywhere near the $28k profit average, and they sell a lot of those. So unless they are selling a lot of $100k+ cars and profiting MORE than $28k on every sale, I don't see how the "average" can be $28k. Not to mention the dealer profit that's not included in what Porsche profits.
I doubt a base boxter of around $45k msrp, or even a boxter S, would get anywhere near the $28k profit average, and they sell a lot of those. So unless they are selling a lot of $100k+ cars and profiting MORE than $28k on every sale, I don't see how the "average" can be $28k. Not to mention the dealer profit that's not included in what Porsche profits.
01-23-2007, 12:30 PM
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Originally Posted by gtg710w
i bet they meant $2800 
01-23-2007, 12:32 PM
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I am now officially substituting the term "earnings-per-car" to "the rip-off factor" in my automotive vocabulary. LOL
(boy am I getting too excited about this thread, lol)
(boy am I getting too excited about this thread, lol)
01-23-2007, 12:34 PM
#80
Senior Moderator
Originally Posted by gavriil
What I am wondering of now is:
Earnings per car for...our friends out of that beautiful little place called Modena.
Earnings per car for...our friends out of that beautiful little place called Modena.
