Billy Wyatt

Sorry car is not worth $120k over GT3RS at base prices. $175K vs $293K no thanks.

Waxer

They are pricing the car to compete with the 488 and 720S.

Petevb

I don't think the US price vs Great Britain is Porsche taking advantage or even intentional. Don't get me wrong, I believe they have insane profit margins on the GT2 RS, likely well north of 50%, however I don't think this signals a shift in pricing policy.

Back in the 80s before Porsche hedged currency we saw prices for some models increase by over 60% in 2-3 years. In that situation sales virtually stop, so Porsche and other manufactures now hedge many years out so that they can damp these fluctuations and avoid ruining their market. The GBP has moved 30% vs the USD in the last couple years, and so current pricing (supported by the hedges) largely reflect the former reality where the US car would have been substantially discounted. We'll see how long it takes the hedges to unwind and pricing to reflect the current exchange rates.

If the GT2 RS is a terrible deal is an interesting question. I suspect it's engine is far cheaper to both develop and quite possibly produce than the GT3's, but if we're paying for "value" (performance) some will argue its price is justified by the forthcoming 'ring time alone...

Jrtaylor9

U r right. The 991.2 GT3RS will be a better deal. And the Gt3 an even better value. If I buy the 2rs it's for the experience of the 2rs and not a value calculation vs the 3rs. Chance i keep the 1.2 3rs. I'll own the 2rs for the experience and sell it to someone that wants the ultimate 911 turbo monster.

Waxer

Nizer: Thanks for pointing that out. Making me think twice about paying that premium over prices for the same car in the UK.

Jrtaylor9

Agree it's primarily just currency move.

evilfij

It is at the upper limit of what I think a 911 should sell for, but dealers are still demanding a premium (I heard that an out of state dealer was asking what I thought was a truly insane premium).

I can't wait for the one of one 6MT GT2RS thread as that would be my perfect car.

Nizer

Interesting observation but I don't think that's the case in this situation. Most global companies will employ a combination of currency, interest rate, and raw material hedging to offset risk between time of procurement and receipt of revenues across markets but it's rare these days for companies to hedge beyond a year due to difficulty in forecasting movements. There are endless examples of corporate treasury departments thinking they had some unique skill in forecasting only to end up in near disaster during major market disruptions. In fact, quite a few companies were forced to declare bankruptcy during the global financial crisis solely because of misguided use of hedging strategies.

Hedging for Porsche was actually a net positive in 2016 and I suspect they work hard to minimize the risk associated with the use of these instruments.

Looking solely at currency movements YTD there's been a significant devaluation of the pound vs the euro as others have pointed out, which if anything should incentivize the company to overprice cars headed to the U.K. That's not happening.

EOD, I still contend this is a "what will the market bear" exercise, much as we see on a micro scale when looking at differentiated pricing for the exact same options across different models. I trust Porsche is feeling immense pressure from litigation costs, as a quick read of their annual report makes clear, and the GT2 RS in the U.S. looks an easy place to boost margins.

Petevb

I don't believe they are attempting to hedge to create profit directly, rather to smooth out the fluctuations seen by the customer. A key to "value based pricing" (clearly the model Porsche is employing across their lineup) is that "discounts" are strategically limited to insure perceived value isn't eroded and customers don't wait for things to go "on sale".

Intentional or not currency fluctuation looks like a "sale" from the customer's point of view, and hence must be avoided. Thus regardless of whether Porsche is actually hedging or simply "self-hedging" to smooth out the bumps I believe the effect is the same- customers are isolated from currency movement to the extent possible.

There is evidence for this. A quick check shows the Turbo S increased in base price 4.5% since 2014 in the U.K. In the US the nominal price has increased by exactly the same amount- 4,5%. Between 2014 and now the GBP also fluctuated vs the Euro, but that's not reflected in the pricing- as far as any given country is concerned I'll wager pricing has increased at a metronomic pace regardless.

Porsche is playing the long game, and as a result currently fluctuations will give certain countries a deal at any given time. Currently the US is getting screwed (relatively).

By the way, we hedge 5 years out on a per contract basis. Not for profit but to mitigate risk. I'd be shocked if Porsche wasn't doing the same in certain instances.

ipse dixit

Exactly.

Guest89

Can you provide a link to the annual report (in English)? PM if you prefer

mcsmcs1

How about the fact that the US dollar is worth 20% more today, relative to the euro, than it was 3 years ago? Porsche is profiting handsomely from US sales of the GT2 RS on a currency-adjusted basis.

TRAKCAR

If you don't track more or harder than many other cars can handle and you're not flipping the car, then I still don't see it.

Manifold

IMO, the GT2 RS is a car of the caliber of exotics, and is priced reasonably to compete with them. But it doesn't seem like a good value compared to the GT3 and GT3 RS, which are also cheaper to track when you factor in the cost of track insurance. A GT2 RS with heavy track miles may also experience greater percentage depreciation than a GT3 or GT3 RS.

Conclusion: because of the price, GT2 RS is best suited as a rich person's toy to be driven infrequently, rather than a car for heavy track use. Which is a shame, because if the cost was about $100K less, I'd probably get one for heavy track use.

evilfij

Any other explanation would be insanity. The playbook is hedge to keep prices stable in a given major market while maintaining profits. Eventually you end up having to do a reset, but the time period for eventually has been extended from what it used to me.