Help me understand Porsche's Business Model... - Rennlist - Porsche Discussion Forums

Notices
991 GT3 GT3RS and 911R
Sponsored by: Inside Car Connection

Help me understand Porsche's Business Model...

Reply

Old 12-04-2017, 10:56 PM
  #1
subshooter
Addict
Rennlist Member
Thread Starter
 
subshooter's Avatar
 
Join Date: Jan 2016
Location: Delaware
Posts: 1,450
Default Help me understand Porsche's Business Model...

I've bought two Porsches in the past 4 years from the same guy. But if I want a GT3 or GT3RS, I have to get on a list and they only give out their limited allocations to their best customers.....the 918 buyer, the last guy that bought 4 PTS GT3RSs and then flipped each of them 12 months later with 12 miles on the odometer for a $50k profit each. My SA mentioned that customers get pissed that although they are good customers, they are not the "best customers" and therefore don't get an allocation.....geesh.

Porsche's business model doesn't make any sense to me at all. If people want to buy a product at MSRP, why wouldn't Porsche build as many as are demanded minus 1?

My thoughts on the reasons....none of which make any sense to me.

1. Limiting production to drive demand? I can understand this for Halo cars like the 918, Carrera GT or the 959. ....but the GT3 or GT4? Nope. These are not Halo cars.

2. Limited Factory production capacity? Maybe.....but why not expand production, add a night shift or make more GT3s instead of Base 911s? They are all made at the same factory in Zuffenhausen. Build another factory.

3. Porsche needs to keep their average fleet CAFE standards within limits so they want to sell more efficient Turbo cars rather than NA cars like the GT3/4. I don't buy this argument at all. Lamborghini just came out with the fastest SUV on the planet with 650 HP......somehow they are able to produce this low MPG, high emissions car and stay afloat in the same regulatory environment. Why not build a factory in China or the US where EU CAFE standards are not applicable? Or if there is a tax for high emission cars, pass it on to the consumer and we will pay it....if they build them.

4. GT3s make less profit. Really? I doubt it. I think these cars are cash cows. How much additional R&D is necessary for the GT3? Not much I think. If they make less profit, raise the price. Demand is there to support it. GT3s making less profit? This argument makes no sense to me.

This whole Porsche allocation process boggles my mind. If I was running PAG and somebody wanted a GT3 at MSRP, I'd say put in your order and we will get it to you in 12 weeks. I'd figure out how to meet demand.

What am I missing?
subshooter is offline  
Reply With Quote
Old 12-04-2017, 11:06 PM
  #2
ranger22
Addict
Rennlist Member
 
ranger22's Avatar
 
Join Date: Jul 2009
Location: Tejas
Posts: 721
Default

You must be new here.....
ranger22 is offline  
Reply With Quote
Old 12-04-2017, 11:08 PM
  #3
evilfij
Addict
Rennlist Member
 
Join Date: Apr 2008
Location: On the internet
Posts: 1,172
Default

Go to your guy and offer ADM. You will get a car. Or just take a car off their lot they need to sell at MSRP to get them some extra money in your GT3. You want one, you will get one. You just have to pay.

Look at it this way, you probably got a pretty good discount on your C4 because the market will only command a certain price for that car. Same is true with the GT3. More people want them than there are available so you see either (1) MSRP dealers but they don’t have any available or (2) ADM directly or really good customers (who are not the flippers as those people are now blackballed). They are limited for the various reasons you state to a greater or lesser degree. I don’t think PAG is holding back on production it’s just that the demand is very high.
evilfij is offline  
Reply With Quote
Old 12-04-2017, 11:09 PM
  #4
subshooter
Addict
Rennlist Member
Thread Starter
 
subshooter's Avatar
 
Join Date: Jan 2016
Location: Delaware
Posts: 1,450
Default

Originally Posted by ranger22 View Post
You must be new here.....
LOL. Yeah in this forum anyway.....

Still...what is up with Porsche's business model? I have observed many of the threads on allocations etc but they don't really answer my quesriton.
subshooter is offline  
Reply With Quote
Old 12-04-2017, 11:13 PM
  #5
0to60
Addict
Rennlist Member
 
0to60's Avatar
 
Join Date: Apr 2015
Posts: 823
Default

Originally Posted by subshooter View Post
I've bought two Porsches in the past 4 years from the same guy. But if I want a GT3 or GT3RS, I have to get on a list and they only give out their limited allocations to their best customers.....the 918 buyer, the last guy that bought 4 PTS GT3RSs and then flipped each of them 12 months later with 12 miles on the odometer for a $50k profit each. My SA mentioned that customers get pissed that although they are good customers, they are not the "best customers" and therefore don't get an allocation.....geesh.

Porsche's business model doesn't make any sense to me at all. If people want to buy a product at MSRP, why wouldn't Porsche build as many as are demanded minus 1?

My thoughts on the reasons....none of which make any sense to me.

1. Limiting production to drive demand? I can understand this for Halo cars like the 918, Carrera GT or the 959. ....but the GT3 or GT4? Nope. These are not Halo cars.

2. Limited Factory production capacity? Maybe.....but why not expand production, add a night shift or make more GT3s instead of Base 911s? They are all made at the same factory in Zuffenhausen. Build another factory.

3. Porsche needs to keep their average fleet CAFE standards within limits so they want to sell more efficient Turbo cars rather than NA cars like the GT3/4. I don't buy this argument at all. Lamborghini just came out with the fastest SUV on the planet with 650 HP......somehow they are able to produce this low MPG, high emissions car and stay afloat in the same regulatory environment. Why not build a factory in China or the US where EU CAFE standards are not applicable? Or if there is a tax for high emission cars, pass it on to the consumer and we will pay it....if they build them.

4. GT3s make less profit. Really? I doubt it. I think these cars are cash cows. How much additional R&D is necessary for the GT3? Not much I think. If they make less profit, raise the price. Demand is there to support it. GT3s making less profit? This argument makes no sense to me.

This whole Porsche allocation process boggles my mind. If I was running PAG and somebody wanted a GT3 at MSRP, I'd say put in your order and we will get it to you in 12 weeks. I'd figure out how to meet demand.

What am I missing?
You are missing an allocation. Pay the current market price for a GT car or move on. Life is far from fair and neither is the allocation situation with GT cars. PAG knows what they are doing and are able to create exclusivity for their GT cars. The cash cow for PAG are every model except their GT cars.
0to60 is online now  
Reply With Quote
Old 12-04-2017, 11:33 PM
  #6
subshooter
Addict
Rennlist Member
Thread Starter
 
subshooter's Avatar
 
Join Date: Jan 2016
Location: Delaware
Posts: 1,450
Default

Originally Posted by 0to60 View Post
You are missing an allocation. Pay the current market price for a GT car or move on. Life is far from fair and neither is the allocation situation with GT cars. PAG knows what they are doing and are able to create exclusivity for their GT cars. The cash cow for PAG are every model except their GT cars.
I am not really interested in what is fair or not. I am interested in the reasoning behind Porsche's business model. Exclusivity is obtained based on the price alone. Raise the price then...... but I shouldn't have to haggle or get on a list 6 months in advance based on a rumor that someone put on the internet etc. I am too busy with life and work to figure out how to game the system.
subshooter is offline  
Reply With Quote
Old 12-04-2017, 11:45 PM
  #7
montoya
Addict
Rennlist Member
 
montoya's Avatar
 
Join Date: Feb 2009
Location: Portland, OR
Posts: 2,210
Default

Originally Posted by subshooter View Post
I've bought two Porsches in the past 4 years from the same guy. But if I want a GT3 or GT3RS, I have to get on a list and they only give out their limited allocations to their best customers.....the 918 buyer, the last guy that bought 4 PTS GT3RSs and then flipped each of them 12 months later with 12 miles on the odometer for a $50k profit each. My SA mentioned that customers get pissed that although they are good customers, they are not the "best customers" and therefore don't get an allocation.....geesh.

Porsche's business model doesn't make any sense to me at all. If people want to buy a product at MSRP, why wouldn't Porsche build as many as are demanded minus 1?

My thoughts on the reasons....none of which make any sense to me.

1. Limiting production to drive demand? I can understand this for Halo cars like the 918, Carrera GT or the 959. ....but the GT3 or GT4? Nope. These are not Halo cars.

2. Limited Factory production capacity? Maybe.....but why not expand production, add a night shift or make more GT3s instead of Base 911s? They are all made at the same factory in Zuffenhausen. Build another factory.

3. Porsche needs to keep their average fleet CAFE standards within limits so they want to sell more efficient Turbo cars rather than NA cars like the GT3/4. I don't buy this argument at all. Lamborghini just came out with the fastest SUV on the planet with 650 HP......somehow they are able to produce this low MPG, high emissions car and stay afloat in the same regulatory environment. Why not build a factory in China or the US where EU CAFE standards are not applicable? Or if there is a tax for high emission cars, pass it on to the consumer and we will pay it....if they build them.

4. GT3s make less profit. Really? I doubt it. I think these cars are cash cows. How much additional R&D is necessary for the GT3? Not much I think. If they make less profit, raise the price. Demand is there to support it. GT3s making less profit? This argument makes no sense to me.

This whole Porsche allocation process boggles my mind. If I was running PAG and somebody wanted a GT3 at MSRP, I'd say put in your order and we will get it to you in 12 weeks. I'd figure out how to meet demand.

What am I missing?
What you are missing is the marketing science behind luxury goods. Scarcity and rarity drives desire for goods that are really just fancy or maybe even not so fancy versions of items you can buy for much less and with no waiting. Just google Birken Bag- same idea here.

In the case of luxury cars, Porsche has had decades of experience driving desire with rarity, probably starting with the first Carrera models. If they produced as many as everyone wanted they would have the Corvette business model, which remains an Everyman sports car simply because you can get it at a discount in as many as you want (says a current Grand Sport owner, LOL!). The Corvette, depending on the model, matches Porsche in almost every performance category, but severely lacks in the deep desire needed to make it a luxury item. Expensive, yes, but seen as a status, luxury symbol- no.
montoya is offline  
Reply With Quote
Old 12-04-2017, 11:45 PM
  #8
evilfij
Addict
Rennlist Member
 
Join Date: Apr 2008
Location: On the internet
Posts: 1,172
Default

Originally Posted by subshooter View Post
I am not really interested in what is fair or not. I am interested in the reasoning behind Porsche's business model. Exclusivity is obtained based on the price alone. Raise the price then...... but I shouldn't have to haggle or get on a list 6 months in advance based on a rumor that some one put in the internet etc. I am too busy with life and work to figure out how to game the system.
No gaming, just pay. Why? Because the dealers can and it makes up for the other vehicles. Has anyone bought a Macan at sticker? How about a 718? $1000 over invoice for leftover new 2017 911.
evilfij is offline  
Reply With Quote
Old 12-04-2017, 11:52 PM
  #9
Jimmy-D
Addict
Rennlist Member
 
Jimmy-D's Avatar
 
Join Date: Mar 2014
Location: Midwest
Posts: 7,258
Default

Honestly- times are changing.

Today MSRP = Market Suggested Retail Price.

I have seen this in a contract.

You can not have it one-way. It is a shame but there are no hidden gems any more. Its like a good stock-by the time you find out about it - too late.

Who needs sales people soon????

Is a new C2S worth what they want at MSRP?? I certainly would not pay it but at the right price and I was looking- may be consider but not paying MSRP

I do not like the ways things are evolving but it seems like this is the today/ future.-
Jimmy-D is offline  
Reply With Quote
Old 12-04-2017, 11:54 PM
  #10
0to60
Addict
Rennlist Member
 
0to60's Avatar
 
Join Date: Apr 2015
Posts: 823
Default

What about PTS ? The OP only asked about allocations, now factor in PTS, lol
0to60 is online now  
Reply With Quote
Old 12-04-2017, 11:56 PM
  #11
evilfij
Addict
Rennlist Member
 
Join Date: Apr 2008
Location: On the internet
Posts: 1,172
Default

Originally Posted by 0to60 View Post
What about PTS ? The OP only asked about allocations, now factor in PTS, lol
PTS for all this year.
evilfij is offline  
Reply With Quote
Old 12-04-2017, 11:58 PM
  #12
subshooter
Addict
Rennlist Member
Thread Starter
 
subshooter's Avatar
 
Join Date: Jan 2016
Location: Delaware
Posts: 1,450
Default

Originally Posted by evilfij View Post
No gaming, just pay. Why? Because the dealers can and it makes up for the other vehicles. Has anyone bought a Macan at sticker? How about a 718? $1000 over invoice for leftover new 2017 911.
The paying part is not the issue. It's the gaming part. I shouldn't need to be on a special list because I bought a 918 or I heard a rumor on the internet and therefore got my name on the dealer's list a year ago. Why wouldn't Porsche just raise the price of a stripped down GT3 to $200k then if they want exclusivity or they want to control supply? Instead, I have to play a game with the system.

I should be able to walk into any dealership and order a car and have it delivered within 12 weeks. If I can't because of supply limitations...then raise the price of the car. That is how supply and demand works in a free market economy.

The people that can't afford the high GT3 price can buy a base 911 and put a Tech Art 2 wing on the back.....
subshooter is offline  
Reply With Quote
Old 12-04-2017, 11:58 PM
  #13
Hula
Addict
Rennlist Member
 
Hula's Avatar
 
Join Date: Jul 2016
Location: Denver
Posts: 199
Default

Originally Posted by subshooter View Post
2. Limited Factory production capacity? Maybe.....but why not expand production, add a night shift or make more GT3s instead of Base 911s? They are all made at the same factory in Zuffenhausen. Build another factory.
Right. Zuffenhausen is at capacity. No room for expansion due to strict zoning laws. They also have some of the most restrictive labor laws. They simply don't want to move production to another plant. Would you buy a 911 built in the Czech Republic? Or Georgia?

Porsche spent a lot of it's history short of cash. The Boxster saved them and the Cayenne made them rich but frugality is built into the DNA. The gobs of cash poured into the 918 development scared them. At $850k MSRP they were worried they couldn't sell 918 examples so they sweetened the deal by offering buyers perks like first dibs on future limited models. It worked.

Last edited by Hula; 12-05-2017 at 02:04 AM. Reason: words
Hula is online now  
Reply With Quote
Old 12-05-2017, 12:05 AM
  #14
dark knight
Addict
Rennlist Member
 
Join Date: Mar 2003
Location: Support our troops! go USA!!!
Posts: 1,690
Default

2. They cannot work night shift due to an agreement with neighbors, I agree completely make more GT3s than base models because I believe you are correct with 4
3. They cant build in China its a German car company with its heart in Germany and the labor union would go insane, the standards apply to cars sold here, plus the psycho eco SJW environment in europe is such skirting the rules can be an issue and even send you to jail
4. I believe this to be true, perhaps some R&D costs a little higher but how much? its essentially a bigger motor with less content , no rear seats, less insulation, no electric wing, no sunroof, cheaper wring harness, more expensive motor, wheels and brakes-how could building more hurt demand? its like the McRib it only comes out during certain parts of the model cycle

I wonder if this model is working? I truly believe that many Mclaren sales are GT3 conquest sales, since F-cars are easier to get, its either buy italian junk or british junk (jk, no offense to our friends) The system as it stands serves only to produce more Mclaren sales, even I looked at one-just looked, sat in read about didn't drive, its like watching **** it not cheating

your last sentence is exactly how I would solve the problem
dark knight is offline  
Reply With Quote
Old 12-05-2017, 12:06 AM
  #15
Jimmy-D
Addict
Rennlist Member
 
Jimmy-D's Avatar
 
Join Date: Mar 2014
Location: Midwest
Posts: 7,258
Default

I should be able to walk into any dealership and order a car and have it delivered within 12 weeks. If I can't because of supply limitations...then raise the price of the car. That is how supply and demand works in a free market economy.[/QUOTE]

You need to define "free market". - sorry - I am playing a little "Devils Advocate" but it deserves some interest but no need to take this thread there.
Jimmy-D is offline  
Reply With Quote
 

Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
dark knight
991 GT3 GT3RS and 911R
109
09-16-2017 09:29 PM
96redLT4
991 GT3 GT3RS and 911R
38
05-29-2017 09:55 PM
dark knight
991 GT3 GT3RS and 911R
23
06-26-2016 11:52 AM
dark knight
991 GT3 GT3RS and 911R
211
01-04-2016 10:54 PM

Thread Tools
Search this Thread
Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Forum Jump


All times are GMT -3. The time now is 10:59 PM.


Copyright ę 1998 - 2017 Rennlist.com We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.
 
  • Ask a Question
    Get answers from community experts
Question Title:
Description:
Your question will be posted in: