Why didn't Porsche simply increase the price of their 718 GT models if they were so p
12-26-2023, 01:01 PM
#16
12-26-2023, 01:14 PM
#17
Rennlist Member
I will state that will many years in the business I never knew of a bunch of Dealers colluding on ADMs, but the answer is fairly simple that many will watch what others are doing an possibly follow The Key is most Dealers do not want their competitors know what they are doing so in most cases there is no real set on pricing. In fact over decades of selling I never told anyone what I was doing ,,exactly, on pricing or discounts because they was the benefit over your competitors. Sure it seems apparent there must be something going on, yet the reality is Dealer Groups operate like the NFL, they want to go to the Super Bowl of profits so they are not sharing their Game Plan with anyone.
ADMs , low, high or none rise and fall with supply and demand and the unfounded ( in my view ) fear of the World becoming battery powered tomorrow , has folks operating on emotion as opposed to logic. Nothing new here, since for many of us a Porsche is a lustmobile , passion is key, and that does stir emotions and desire.
If we follow history, if supplies open up, or we have long periods of high interest rates , then prices as a whole will drop.
ADMs , low, high or none rise and fall with supply and demand and the unfounded ( in my view ) fear of the World becoming battery powered tomorrow , has folks operating on emotion as opposed to logic. Nothing new here, since for many of us a Porsche is a lustmobile , passion is key, and that does stir emotions and desire.
If we follow history, if supplies open up, or we have long periods of high interest rates , then prices as a whole will drop.
The following users liked this post:
0-Day (12-27-2023)
12-26-2023, 08:51 PM
#19
I will state that will many years in the business I never knew of a bunch of Dealers colluding on ADMs, but the answer is fairly simple that many will watch what others are doing an possibly follow The Key is most Dealers do not want their competitors know what they are doing so in most cases there is no real set on pricing. In fact over decades of selling I never told anyone what I was doing ,,exactly, on pricing or discounts because they was the benefit over your competitors. Sure it seems apparent there must be something going on, yet the reality is Dealer Groups operate like the NFL, they want to go to the Super Bowl of profits so they are not sharing their Game Plan with anyone.
ADMs , low, high or none rise and fall with supply and demand and the unfounded ( in my view ) fear of the World becoming battery powered tomorrow , has folks operating on emotion as opposed to logic. Nothing new here, since for many of us a Porsche is a lustmobile , passion is key, and that does stir emotions and desire.
If we follow history, if supplies open up, or we have long periods of high interest rates , then prices as a whole will drop.
ADMs , low, high or none rise and fall with supply and demand and the unfounded ( in my view ) fear of the World becoming battery powered tomorrow , has folks operating on emotion as opposed to logic. Nothing new here, since for many of us a Porsche is a lustmobile , passion is key, and that does stir emotions and desire.
If we follow history, if supplies open up, or we have long periods of high interest rates , then prices as a whole will drop.
The following 2 users liked this post by usctrojanGT3:
Larry Cable (12-28-2023),
ldamelio (12-28-2023)
12-26-2023, 08:58 PM
#20
Rennlist Member
Thread Starter
12-26-2023, 11:27 PM
#21
Drifting
The taycans still depreciate pretty good compared to other stuff in that price bracket that are similar. 6 figure sedan DD's have always been bad for resale. An S class merc is brutal, and so is a 7 series bmw. I saw my first i7 Bmw rolling around in my neighbourhood 2 days ago that didn't have a dealer plate and I suspect that thing will depreciate so bad it'll make a normal 7 series look like a good investment.
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Larry Cable (12-28-2023)
12-27-2023, 08:12 PM
#22
RL Community Team
Rennlist Member
Rennlist Member
Genuinely curious.I understand that in most markets, additional dealer markup is illegal, but even in those markets, the waiting lists for the Spyder/GT4 were insane. If the market was willing to accept a 10-20-30k ADM on these models, why didn't Porsche increase the base price?
Source please.
12-28-2023, 06:01 AM
#23
Rennlist Member
He must be referring to the European Markets.
To the OP, most of Porsche sports car lineup increased +/- 10% back in May/June of this year. Prior to that, the 718 lineup GT4/Spyder increased ~5% for its last MY of production, I built a 911 T when I was looking for my GT4 around this time last year, and the build came out to 135K, same car on the configurator today goes for 148K
To the OP, most of Porsche sports car lineup increased +/- 10% back in May/June of this year. Prior to that, the 718 lineup GT4/Spyder increased ~5% for its last MY of production, I built a 911 T when I was looking for my GT4 around this time last year, and the build came out to 135K, same car on the configurator today goes for 148K
01-01-2024, 04:51 PM
#25
So, as many said Porsche did increase their MSRP (likely in accordance w/ demand, but more probably due to rising costs for them - no one is immune from inflation). I think, however, the ADM game has less to do with Porsche and more to do with the dealerships. Porsche makes X amount per car they offload to the dealers and once their bottom line is met, they don't then seem to care how the cars are sold at the dealership level. Add't, PAG stands to make more from ADMs if the bloated car price is financed through Porsche Financial Services. Thus, as long as there is demand and ADMs are not illegal, they will continue to exist due to human desire to maximize profit.
There also exists a delicate balance between fattening the PAG bottom line and fattening the dealership bottom line. To abruptly raise MSRP in an effort to siphon off any profits the dealerships were expecting (in the form of ADMs) probably would get an uproar from the dealerships, i.e. the $300M lawsuit from FL Pcar dealership, The Collection, to PCNA for decreased allocations
Just to be clear, as a consumer, I would prefer it if ADMs became illegal. However, as the world trends more towards recession, I think ADMs will becomes less ridiculous overall (it already has)
There also exists a delicate balance between fattening the PAG bottom line and fattening the dealership bottom line. To abruptly raise MSRP in an effort to siphon off any profits the dealerships were expecting (in the form of ADMs) probably would get an uproar from the dealerships, i.e. the $300M lawsuit from FL Pcar dealership, The Collection, to PCNA for decreased allocations
Just to be clear, as a consumer, I would prefer it if ADMs became illegal. However, as the world trends more towards recession, I think ADMs will becomes less ridiculous overall (it already has)
01-01-2024, 05:57 PM
#26
It claims that Porsche then withheld all pool-car allocations. Porsche says that pool cars are assigned to dealers at the factory’s discretion and typically account for no more than 20 percent of available inventory. Another Porsche dealer, who spoke on condition of anonymity, said that the vehicles give the automaker the ability to “reward dealers who are doing a great job and curtail people that don’t want to do what the manufacturer wants.”
01-01-2024, 06:08 PM
#27
Rennlist Member
Google
It claims that Porsche then withheld all pool-car allocations. Porsche says that pool cars are assigned to dealers at the factory’s discretion and typically account for no more than 20 percent of available inventory. Another Porsche dealer, who spoke on condition of anonymity, said that the vehicles give the automaker the ability to “reward dealers who are doing a great job and curtail people that don’t want to do what the manufacturer wants.”
It claims that Porsche then withheld all pool-car allocations. Porsche says that pool cars are assigned to dealers at the factory’s discretion and typically account for no more than 20 percent of available inventory. Another Porsche dealer, who spoke on condition of anonymity, said that the vehicles give the automaker the ability to “reward dealers who are doing a great job and curtail people that don’t want to do what the manufacturer wants.”
01-02-2024, 12:26 AM
#28
This is correct. I actually spoke to one of the largest dealers in SoCal who explained to me the allocation system is very formula driven the US. If 1000 GT4RS's are going to be allocated in America for 2024 then 20% are held by Porsche regional reps who can reward specific dealerships that say punch a bunch of Macan's as "sold" to hit some goal for that regional rep and start the warranty period or compete in some kind of contest Porsche does. The other 80% of allocations are awarded based on volume. If the #1 dealer in sells 5% of all Porsche's then they will get 5% of that 80% of allocations left, #2 4.5%, #3 4%, etc.
01-02-2024, 12:56 AM
#29
Just a reminder that not everyone lives in the Unites States where every car is basically a used car - that is, afaik US car market is unique in that "dealers" are multimillionaires that buy hundreds of cars from the manufacturer, and then they sell it at whatever price they want - basically like a used car.
In my case, being a Korean living in Korea, new cars can only be sold at MSRP or less.
That did indeed lead to expensive cars with high demand being resold after purchase for ~$20k profit, but now that the economy is in the ****ter, it's already a -20k depreciation the second the ignition is on.
In summary,
1. Not all countries have dealerships that are private family businesses who essentially buy out the cars from the manufacturers and then sell them at whatever price they want.
2. At least in Korea, my 718 4.0 bgts newly specced at 119k USD MSRP including options arriving to port next week, will be depreciated to around 99k the very millisecond I put my key in ignition.
3. I guess Porsche could set MSRP differently per state in the US, but honestly that's your problem with being one of the wealthiest countries with a car market structure that greatly incentivises collusion by multibillionaire dealers.
In my case, being a Korean living in Korea, new cars can only be sold at MSRP or less.
That did indeed lead to expensive cars with high demand being resold after purchase for ~$20k profit, but now that the economy is in the ****ter, it's already a -20k depreciation the second the ignition is on.
In summary,
1. Not all countries have dealerships that are private family businesses who essentially buy out the cars from the manufacturers and then sell them at whatever price they want.
2. At least in Korea, my 718 4.0 bgts newly specced at 119k USD MSRP including options arriving to port next week, will be depreciated to around 99k the very millisecond I put my key in ignition.
3. I guess Porsche could set MSRP differently per state in the US, but honestly that's your problem with being one of the wealthiest countries with a car market structure that greatly incentivises collusion by multibillionaire dealers.
Last edited by jungleahri; 01-02-2024 at 01:01 AM.
01-02-2024, 01:22 AM
#30
Rennlist Member
Thread Starter
Just a reminder that not everyone lives in the Unites States where every car is basically a used car - that is, afaik US car market is unique in that "dealers" are multimillionaires that buy hundreds of cars from the manufacturer, and then they sell it at whatever price they want - basically like a used car.
In my case, being a Korean living in Korea, new cars can only be sold at MSRP or less.
That did indeed lead to expensive cars with high demand being resold after purchase for ~$20k profit, but now that the economy is in the ****ter, it's already a -20k depreciation the second the ignition is on.
In summary,
1. Not all countries have dealerships that are private family businesses who essentially buy out the cars from the manufacturers and then sell them at whatever price they want.
2. At least in Korea, my 718 4.0 bgts newly specced at 119k USD MSRP including options arriving to port next week, will be depreciated to around 99k the very millisecond I put my key in ignition.
3. I guess Porsche could set MSRP differently per state in the US, but honestly that's your problem with being one of the wealthiest countries with a car market structure that greatly incentivises collusion by multibillionaire dealers.
In my case, being a Korean living in Korea, new cars can only be sold at MSRP or less.
That did indeed lead to expensive cars with high demand being resold after purchase for ~$20k profit, but now that the economy is in the ****ter, it's already a -20k depreciation the second the ignition is on.
In summary,
1. Not all countries have dealerships that are private family businesses who essentially buy out the cars from the manufacturers and then sell them at whatever price they want.
2. At least in Korea, my 718 4.0 bgts newly specced at 119k USD MSRP including options arriving to port next week, will be depreciated to around 99k the very millisecond I put my key in ignition.
3. I guess Porsche could set MSRP differently per state in the US, but honestly that's your problem with being one of the wealthiest countries with a car market structure that greatly incentivises collusion by multibillionaire dealers.
2. How is that possible? If the demand is so high, I assume 90% of people that want and can afford one, don't get an allocation