** The "market adjustment" issue **
09-27-2015, 03:17 PM
#91
Race Director
Thread Starter
[quote=ipse dixit]I'm curious.
For those who refuse to pay over MSRP.
Is the same true for paying below MSRP? Do you refuse to do so because you don't want to be accused of being a "stealer"?
Have you ever seen a 100K or even 20K UNDER MSRP? Or any discount on a GT car??
I think everyone would agree from a marketing standpoint it just looks terrible for the dealers and Porsche as well.
For those who refuse to pay over MSRP.
Is the same true for paying below MSRP? Do you refuse to do so because you don't want to be accused of being a "stealer"?
Have you ever seen a 100K or even 20K UNDER MSRP? Or any discount on a GT car??
I think everyone would agree from a marketing standpoint it just looks terrible for the dealers and Porsche as well.
09-27-2015, 03:30 PM
#92
Race Director
Thread Starter
Originally Posted by usctrojanGT3
One way to solve it is to auction style bidding for allocations. Cars are sold at market prices and everyone gets their fair shot.
Whoever it was, then they would be the accused stealer.
09-27-2015, 04:33 PM
#93
Burning Brakes
Anyone who's arguing on the "Stealerships" behalf saying they should have the right to EXCESSIVELY markup the prices just doesn't get it, in my eyes. It's not a personal attack on you, if you fall into that category. I just disagree with you on this topic. If Porsche themselves, elevated the MSRP for these cars knowing that they'd be sought after, then fine. But adding exorbitant markups by the dealers themselves is absolutely wrong in my eyes. In fact, there are laws against it for most industry's. Using the excuse that they sit on other low margin cars as an excuse is incorrect as well. Dealers are in the business to make money. They often are in high rent districts on large parcels of land. Trust me, they're not losing any money by sitting on a $150K Cayenne Turbo S for a couple of months. They make their money with the bread and butter under MSRP Boxster's, Cayman's and 911 C2's. Yes, under MSRP and they're still making plenty of money to keep their doors WIDE open. In my opinion, it's up to the dealers to give feedback to PCNA, who then turns to PAG to ask for higher MSRP's for the "Special" cars such as GT3's, RS's etc. This "Market adjustment" mentality is absolutely a reflection of what's wrong with Mankind. If you disagree, then you probably see nothing wrong with what Martin Shkreli did when he raised the AID's patient drug which needs to be taken daily from $13.50 per pill to $700 per pill. After all, supply and demand. In my opinion PAG/PCNA should take away the allocations of GT cars and rare editions cars from the worst offenders. Where do you draw the line though, 10k over? 25k over? 100k+ over? The practice needs to be put to an end.
09-27-2015, 04:35 PM
#94
Race Director
Thread Starter
Well said ^^^^
You also forgot income from the service department. I'm not knocking free enterprise, but to think this is good for anyone is mistaken. After all, how many allocations do they get of these GT cars? Very few.
If I were a dealer, I'd offer them at MSRP to my best customers who have a long history buying cars from me. How do you think they feel when they see their local dealer screw them over just to make a few extra bucks??
The only people that are opposed to Porsche making more are current owners who want to have cars with lower than average depreciation. You'd have them bitching to Porsche about that then. Can you win?
You also forgot income from the service department. I'm not knocking free enterprise, but to think this is good for anyone is mistaken. After all, how many allocations do they get of these GT cars? Very few.
If I were a dealer, I'd offer them at MSRP to my best customers who have a long history buying cars from me. How do you think they feel when they see their local dealer screw them over just to make a few extra bucks??
The only people that are opposed to Porsche making more are current owners who want to have cars with lower than average depreciation. You'd have them bitching to Porsche about that then. Can you win?
09-27-2015, 04:49 PM
#95
Nordschleife Master
Anyone who's arguing on the "Stealerships" behalf saying they should have the right to EXCESSIVELY markup the prices just doesn't get it, in my eyes. It's not a personal attack on you, if you fall into that category. I just disagree with you on this topic. If Porsche themselves, elevated the MSRP for these cars knowing that they'd be sought after, then fine. But adding exorbitant markups by the dealers themselves is absolutely wrong in my eyes. In fact, there are laws against it for most industry's. Using the excuse that they sit on other low margin cars as an excuse is incorrect as well. Dealers are in the business to make money. They often are in high rent districts on large parcels of land. Trust me, they're not losing any money by sitting on a $150K Cayenne Turbo S for a couple of months. They make their money with the bread and butter under MSRP Boxster's, Cayman's and 911 C2's. Yes, under MSRP and they're still making plenty of money to keep their doors WIDE open. In my opinion, it's up to the dealers to give feedback to PCNA, who then turns to PAG to ask for higher MSRP's for the "Special" cars such as GT3's, RS's etc. This "Market adjustment" mentality is absolutely a reflection of what's wrong with Mankind. If you disagree, then you probably see nothing wrong with what Martin Shkreli did when he raised the AID's patient drug which needs to be taken daily from $13.50 per pill to $700 per pill. After all, supply and demand. In my opinion PAG/PCNA should take away the allocations of GT cars and rare editions cars from the worst offenders. Where do you draw the line though, 10k over? 25k over? 100k+ over? The practice needs to be put to an end.
09-27-2015, 04:51 PM
#96
Race Director
Thread Starter
I would argue a mere 20% increase in production would solve everything. Demand isn't as widespread as one would think.
Supply gets close to demand, Porsche has a bit more economies of scale, and everyone is happy. It would even make sense to just knock out a bunch of nice optioned ones to make things easier too (not a a solution, but it would help). Like the PTS ones.
The one thing that seems to be causing the biggest problems is the 918 VIP program. Eating up all the PTS too.
I think there's someone at Porsche that's just really making some bad decisions. Surprise, surprise
Supply gets close to demand, Porsche has a bit more economies of scale, and everyone is happy. It would even make sense to just knock out a bunch of nice optioned ones to make things easier too (not a a solution, but it would help). Like the PTS ones.
The one thing that seems to be causing the biggest problems is the 918 VIP program. Eating up all the PTS too.
I think there's someone at Porsche that's just really making some bad decisions. Surprise, surprise
09-27-2015, 05:16 PM
#97
Drifting
[QUOTE=STG991;12624650]
To add:
- Yes, the dealers are doing nothing wrong. They own the product. A limited luxury product in demand and they can retail them for whatever they want. You obviously cannot require a dealer to "sell" products at a MSRP retail, it's price fixing. You will lose that battle in court.
- That said, in a world where more and more brands are "concerned" about how their products "appear" pricing wise to the buying public MAP pricing verbiage has been written into dealer agreements. And enforced for perception reasons.
- I sell $500 Gore Tex jackets, they are always "advertised" at MSRP but many are sold on the floor in shops at 10% off full retail. That's their call and we don't mind. However, making 30% margins instead of 40% margins you risk running a non profitable business. They are not sold "over" retail because they simply would lose the business to other shops. That's why Porsche is playing a dangerous game with an almost collusion style of reward and allocation. I think long term it would help them as a brand to spread these cars across more dealers and buyers. Bigger demographic and more "new" customers for the brand.
-What luxury brand willingly "advertises" that they can get a huge premium over MSRP? Much less 150K over retail. Have you ever seen Rolex do that? Any brand come to mind? No. That's absurd.
- I can't think of any business/brand other than the car business and Porsche that have enough "*****" to rub these "market adjusted" retails in their consumers faces. They are creating a perception of a greedy non-customer friendly brand when they don't have to. Even the salesman seem to relish in this "look what we can get" attitude. I'm willing to bet they would still get their "market adjusted" price in the end with a better brand perception with a little more subtle approach to pricing. They want to be the leader in technology etc. but their pricing and allocation process are draconian.
-I'm also tired of the "they need to make bank/margin on these GT cars because they don't profit much on the lower priced cars". That's also absurd. Margins are built into the cars for the dealers to make. If they don't sell it's because they have either made the wrong car or a non-competitive car in it's segment.
It's a short term money grab for profit strategy. It always is. See the VW issue of late. Only time will tell if it's smart or not. I personally think perception matters in a brand big time..
Originally Posted by ipse dixit
I'm curious.
For those who refuse to pay over MSRP.
Is the same true for paying below MSRP? Do you refuse to do so because you don't want to be accused of being a "stealer"?
Have you ever seen a 100K or even 20K UNDER MSRP? Or any discount on a GT car??
I think everyone would agree from a marketing standpoint it just looks terrible for the dealers and Porsche as well.
For those who refuse to pay over MSRP.
Is the same true for paying below MSRP? Do you refuse to do so because you don't want to be accused of being a "stealer"?
Have you ever seen a 100K or even 20K UNDER MSRP? Or any discount on a GT car??
I think everyone would agree from a marketing standpoint it just looks terrible for the dealers and Porsche as well.
- Yes, the dealers are doing nothing wrong. They own the product. A limited luxury product in demand and they can retail them for whatever they want. You obviously cannot require a dealer to "sell" products at a MSRP retail, it's price fixing. You will lose that battle in court.
- That said, in a world where more and more brands are "concerned" about how their products "appear" pricing wise to the buying public MAP pricing verbiage has been written into dealer agreements. And enforced for perception reasons.
- I sell $500 Gore Tex jackets, they are always "advertised" at MSRP but many are sold on the floor in shops at 10% off full retail. That's their call and we don't mind. However, making 30% margins instead of 40% margins you risk running a non profitable business. They are not sold "over" retail because they simply would lose the business to other shops. That's why Porsche is playing a dangerous game with an almost collusion style of reward and allocation. I think long term it would help them as a brand to spread these cars across more dealers and buyers. Bigger demographic and more "new" customers for the brand.
-What luxury brand willingly "advertises" that they can get a huge premium over MSRP? Much less 150K over retail. Have you ever seen Rolex do that? Any brand come to mind? No. That's absurd.
- I can't think of any business/brand other than the car business and Porsche that have enough "*****" to rub these "market adjusted" retails in their consumers faces. They are creating a perception of a greedy non-customer friendly brand when they don't have to. Even the salesman seem to relish in this "look what we can get" attitude. I'm willing to bet they would still get their "market adjusted" price in the end with a better brand perception with a little more subtle approach to pricing. They want to be the leader in technology etc. but their pricing and allocation process are draconian.
-I'm also tired of the "they need to make bank/margin on these GT cars because they don't profit much on the lower priced cars". That's also absurd. Margins are built into the cars for the dealers to make. If they don't sell it's because they have either made the wrong car or a non-competitive car in it's segment.
It's a short term money grab for profit strategy. It always is. See the VW issue of late. Only time will tell if it's smart or not. I personally think perception matters in a brand big time..
Last edited by Mr. Adair; 09-27-2015 at 05:33 PM.
09-27-2015, 05:18 PM
#98
Drifting
Anyone who's arguing on the "Stealerships" behalf saying they should have the right to EXCESSIVELY markup the prices just doesn't get it, in my eyes. It's not a personal attack on you, if you fall into that category. I just disagree with you on this topic. If Porsche themselves, elevated the MSRP for these cars knowing that they'd be sought after, then fine. But adding exorbitant markups by the dealers themselves is absolutely wrong in my eyes. In fact, there are laws against it for most industry's. Using the excuse that they sit on other low margin cars as an excuse is incorrect as well. Dealers are in the business to make money. They often are in high rent districts on large parcels of land. Trust me, they're not losing any money by sitting on a $150K Cayenne Turbo S for a couple of months. They make their money with the bread and butter under MSRP Boxster's, Cayman's and 911 C2's. Yes, under MSRP and they're still making plenty of money to keep their doors WIDE open. In my opinion, it's up to the dealers to give feedback to PCNA, who then turns to PAG to ask for higher MSRP's for the "Special" cars such as GT3's, RS's etc. This "Market adjustment" mentality is absolutely a reflection of what's wrong with Mankind. If you disagree, then you probably see nothing wrong with what Martin Shkreli did when he raised the AID's patient drug which needs to be taken daily from $13.50 per pill to $700 per pill. After all, supply and demand. In my opinion PAG/PCNA should take away the allocations of GT cars and rare editions cars from the worst offenders. Where do you draw the line though, 10k over? 25k over? 100k+ over? The practice needs to be put to an end.
09-27-2015, 05:21 PM
#99
Race Car
Spot on Mr Adair
09-27-2015, 05:27 PM
#100
Drifting
agree with this for the most part. its just even simpler to me. Porsche needs to hiring a pricing expert onto their team. Their GT cars are clearly priced too low. They are leaving profit to dealers and flippers. vs. taking the profit themselves. I am not itching to pay more. But I would rather it come from a higher MSRP than all the ebay auction BS that is occurring between dealers, brokers, etc. Its at an excess from what I have seen in the past. Dealers buying allocations from each other at premiums, 3-way trades for slots/premiums, its kind of crazy right now. Porsche could raise MSRP, raise production, and everyone would still make out better than the current approach.
09-27-2015, 06:22 PM
#101
Race Car
I would love to know what some of these are actually selling for. I find it a little weird that a car would get listed private party or even in eBay at a number and it doesn't sell yet a stealership lists it for $23k more or $13k over MSRP and then they will inevitably post "sold". I would love to know what it actually sells for but of course they would never post that.
09-27-2015, 06:37 PM
#102
Nordschleife Master
Flippers should never be factored into retail pricing. The secondary market is a whole different kettle of fish. Brands need to be focused on new car pricing/margins/inventory control and demand. The luxury watch market takes a beating on the secondary market but the same luxury brands are thriving at retail.
Last edited by mrsullivan; 09-27-2015 at 07:13 PM.
09-27-2015, 07:50 PM
#103
Drifting
09-27-2015, 07:59 PM
#104
Easy way to fix the problem on the dealer side as well as company side. Have low inventory or no inventory dealerships where the cars on the floor are for Demo only. Each car is then manufactured as the customer orders it and delivered at msrp. No cap on production. Naturally you will sell less gt cars than caymans and cayennes. Let the supply and demand even itself out.
I mean, why have hundreds of options available on the menu but force customers to buy already built dealer/factory optioned cars? Dealers then have to sit on extra inventory until the right customer happens along. Porsche is a boutique custom car company. They should build cars that people want. I'll buy a ford truck by going to the dealership and browsing. I want my Porsche to be like I want it.
Right now the frenzy for gt cars is not being fueled by actual demand. I think that the market is artificially elevating the demand for the car because opportunists and speculators (read dealers and flippers) are soaking up the allocations and people who really want the cars who are enthusiasts are left on waiting lists. It's a crazy way to do business.
On the markup business, how many people who wanted a new iPhone payed AT&T or Verizon stores more than msrp for their phone because the supply couldn't meet demand?
I mean, why have hundreds of options available on the menu but force customers to buy already built dealer/factory optioned cars? Dealers then have to sit on extra inventory until the right customer happens along. Porsche is a boutique custom car company. They should build cars that people want. I'll buy a ford truck by going to the dealership and browsing. I want my Porsche to be like I want it.
Right now the frenzy for gt cars is not being fueled by actual demand. I think that the market is artificially elevating the demand for the car because opportunists and speculators (read dealers and flippers) are soaking up the allocations and people who really want the cars who are enthusiasts are left on waiting lists. It's a crazy way to do business.
On the markup business, how many people who wanted a new iPhone payed AT&T or Verizon stores more than msrp for their phone because the supply couldn't meet demand?
09-27-2015, 08:00 PM
#105
Drifting
I would love to know what some of these are actually selling for. I find it a little weird that a car would get listed private party or even in eBay at a number and it doesn't sell yet a stealership lists it for $23k more or $13k over MSRP and then they will inevitably post "sold". I would love to know what it actually sells for but of course they would never post that.
