jungleahri

You're right, when the demand was high, the waitlist was usually ~2+ years. It was either wait 2~3 years, or buy a used one with 100 miles.

I don't see how the dealer can be just a middle man while they pocket $20k while doing basically nothing.
PAG/PCNA should stop selling to the dealers that pocket ADM - just like Ferarri refusing to sell to a customer who resells the car within the first year of purchase(at least I heard that's how it is in Korea)

ScratchTheItch

Problem with raising the prices (other than unsustainable and the risk to the brand) is that even then it keeps the ball in the dealers' court and that's the largest problem with Porsche. But you can't fully blame the dealers...it's equally on Porsche for the system they've perpetuated but also the $ pressure they've added to dealers. The dealers are not the only one driving this.

Some dealerships think about the LTV of the customer, others simply want to maximize the profit on each sale. The latter is obviously near-sighted but the boon times of the last few years have created short memories. I had a local dealer tell me even their #1 "best" customer pays a mark up, it's simply how they do business. My reply was basically why would I bother trying to build up my history when they basically told me upfront it won't be rewarded? Their response was basically "we have plenty of customers"...but the pendulum always swings and they seem to forget that.

But Porsche (PAG/PCNA) is also culpable here. They have indeed made it harder for dealers. All of those $10k watches, bikes, etc...the dealers are forced to take those on and carry the inventory. So what's a dealer to do? They take the easy route and start adding markups to compensate, bundling these with cars, etc. Yes the smart dealers will figure out how to run a sustainable, long term business vs. milking each drop from individual transactions but the milking has been good these past few years. And by not caring HOW their dealerships hit their bottom line, well you get what you see here.

Even Ferrari has wised up in recent years and made it easier for first time buyers. Contrary to what this forum thinks, you do not need to buy a Roma, Portofina, etc. before you get a F8, 296, etc. Instead you will be given an allocation but your place in line is further back as a first time (or low level) buyer. If they tell you that you are getting one then you are getting one, and it will be MSRP. Then the factory makes the decisions on who gets the "special" cars based on whats in their history + garage. Flip, and you'll be penalized. Also what happens with Porsche if your current GM, Sales Manager, ownership group etc. moves on? You're stuck. The other marquees actually have somewhat of a centralized customer management system that helps you out.

The greatest trick Porsche has ever pulled is convincing their fans that alternatives don't exist...

ScratchTheItch

No one likes a mark-up but making them "illegal" is a slippery slope in this capitalist, free market economy that I'd like to continue living in. However making it "against PGAs terms" is more like it, if Porsche could truly figure out how to maximize the LTV of their customers and revise their dealership model to achieve that.

Yet, we all complain about mark ups but then happily take a 5-10% discount. I am OK with a reasonable mark up, but not the absurdities of what we've seen and the lack of PGA to seem to have a solution for the brand. It's simply driven me away from Porsche and to other brands which has been revelatory to say the least.

Thescout13

We already have price gouging laws in place, and that doesn’t seem to be too slippery. But I agree, PCNA should penalize dealers by contract, or we abolish the mans on D2C car sales

ScratchTheItch

Price gauging laws largely apply to necessities i.e. food, water, gas...not six figure sports cars. Needs, not wants.

There are a few intermediary things PAG could do other than trying to revise their entire dealer terms/agreements which would likely be a total mess. Lamborghini did this recently as a way to step in to limit flipping without dramatically changing their dealer model and getting everyone into an uproar. Examples include:
1) Require verified deposits upfront, meaning HQ (not dealer) verifies them centrally and verifies the customer - no more fake orders or customers trying to get multiple cars across multiple dealerships
2) Have customers sign a ROF for the first year. These aren't very strong legally speaking however they do make it easy to then track and enforce a ban if someone flips the car.
3) Centralized CRM for hot cars - yes the dealer selects the customer but HQ reviews the customers' ownership history to make sure nothing funky is going on before validating their allocation

The problem is I really don't think PAG cares as long as the dealer is hitting their bottom line and fattening them up.

TXRubicon

This is an eye-opening look at how powerful automotive dealership lobbies are in the United States. What you're asking makes sense, but the dealer lobbies will and have fought with a lot of money to keep things as they are. Lawmakers will side with the people who have the money, so OEMs in the US are fairly powerless against dealer franchises. The current dealer model isn't changing anytime soon.

https://slate.com/news-and-politics/...-desantis.html

0-Day

Similar to your suggestion, the big 3 US automakers dramatically increased prices on their full size trucks in the past 3 years. Comparable truck models have increased in price by about 40% since 2019. And as a result, big 3 dealer lots are currently flooded with full size pickup trucks. Earlier in 2023, Big 3 truck manufacturers were actually cutting shifts at their plants to address the inventory glut. And even today, full size trucks can be had with hefty discounts. Few shoppers can afford $60k-100k+ trucks, even if they need one for their livelihood.

In the truck market, a certain subset of buyers NEEDS to buy a full size truck. They require it for their work and livelihood. But even in this market, higher prices crushed demand.

If a manufacturer of vehicles that are purely a luxury (like a Porsche sports car) dramatically increased their pricing, I would expect to see an even greater demand decline. But who knows... Markets for luxury goods often perform in irrational ways…