Manifold

Friend of mine is an auto supply chain expert in a global company. He says Porsche doesn't currently have supply chain problems because they pay a premium and can get whatever they need. They're making as many cars as they want to make, and aren't making more to meet the current high demand because they take the long view. They don't like flippers and can make more cars to reduce flipping, but it's a delicate balance to avoid oversupply of cars. So I think that prices will be driven mainly by demand for the foreseeable future, and that of course depends on who has how much money and what they want to do with that money.

maroli

Thing looks awesome

rusmani

Sure does. Great spec. Hope it goes to a home where it's driven and enjoyed!

mad_max

Now that Porsche is a public company would there be pressure to make more GT cars so they can claim a piece of these profits that third parties are making on their cars?

Manifold

My friend says that exclusivity is part of the marketing strategy, and higher prices in the used market promotes that exclusivity, so I guess not trying to capture those higher profits in the short term is part of the long view strategy.

I suspect that Porsche understands us GT car buyers better than we understand ourselves!

maroli

The relative rarity of GT cars drives other models' sales. That is a key piece of the strategy. 'I can't get a GT3 unless I buy 3 other cars' OR 'I can't get a GT3 but this GTS is close enough'

ipse dixit

Not doubting your friend, but that's hard to believe.

Not that Porsche doesn't have supply chain problems. But that your friend would have such full visibility to Porsche's entire supply chain to make such an absolute claim. Which includes production capacity, labor availability, and not just parts and widgets. In fact, I don't know of anyone that has such plenary insight into any particular company to make such an unqualified statement, even financial analysts and bankers that do this stuff for a living. And when they make statements like that it's based on reports from the companies themselves and onsite visits, not as an outside observer like your friend.

Manifold

My friend is a Partner-level guy in this industry, well paid for his expertise. Frequently travels around the world, talks to a lot of people. He's confident in what he's telling me. And look at the numbers I posted earlier in the thread: there was a little dip in volume of cars produced in 2020, but the 2021 and 2022 numbers are at pre-pandemic levels. Maybe Porsche wants us to think there are supply chain problems to promote the image of scarcity and exclusivity.

ipse dixit

That's not really relevant without context.

Because a supply chain problem (i.e., shortage) is a function of two variable: supply and demand.

Just because supply is comparable to pre-pandemic levels does not mean there is not a supply shortage currently. One has to know what the current demand is vis-a-vis the demand pre-pandemic to make any type of claims about the supply issues currently.

Manifold

I'm just sharing what I heard. Y'all can take with whatever grain of salt you think is appropriate.

Peruna

Wow - that must be the new PTS color, "falling knife green" . I have it on good authority it'll be worth 20k less than MSRP at 12:01am, 1-1-2023...

ipse dixit

I am genuinely curious. Not trolling.

If you're friend really has that kind of insight and visiblity to Porsche's supply chain, can you ask her or him why Porsche is not allowing customers to spec either LWB or Bose or PCCBs on the 992 Carrera T?

I know LWBs will be available in a few weeks, but as of now, Porsche is not allowing customers to spec either Bose or PCCBs on the T, even tho they are both options for the car.

Manifold

Those are rather narrow and specific questions, and it would probably take him some digging to get answers, if he can get them. I can't justify asking him to take the time to do that just because someone on RL asked about it. Sorry.

WCGhost

I've seen this strategy in other luxury brands, it just doesn't make sense why they would do this to this specific level. I get you want to come off as exclusive, but why be so exclusive that your product is selling for 50% more than your recommended price? Seems like you are just leaving money on the table, you can't really easily get their other models either, so the idea that they want to use this to get people to buy a GTS instead, does not make sense when a GTS is not easily available at MSRP either. I heard this strategy with Rolex, but Rolex has no watches at all, just empty shelves so you can't really buy their more common models either, eventually some people move on to other brands because of the buying experience is not enjoyable. Many more millionaires have been made over the past few years, but production does not seem like it has gone up with the same proportions. I would think a balance is when your car is consistently selling 10-20% higher than MSRP, not 50%, either raise the MSRP or produce more, otherwise you are leaving money on the table. If moving to EV, who knows if people will ever be this excited about your products again.

Manifold

It seems counterintuitive to me too, but let's assume that Porsche wants to sell a steady, or steadily increasing, volume of cars each year, with prices increasing incrementally each year (with price increases at least matching the average trend of inflation), and maintaining their high profit margins. That would mean that they shouldn't greatly increase prices in a given year, because that would set the prices higher for subsequent years, which could be a problem if the economy weakens and demand for the cars falls. They also shouldn't make a lot more cars to meet a temporarily high demand, because those cars will remain in service for at least a decade, so supplying too many cars during a period will result in a drop in demand (less cars made and sold) in a subsequent period, and being able to easily get a car during a low-demand period will also hurt the image of exclusivity.

If this is Porsche's long view strategy, I do think that prices are currently in a bubble, which will burst as the economy cools and stimulus money gets used up, resulting in demand for these cars dropping, people who overpaid for them and are no longer enamored with them wanting to dump them before prices fall further, new car prices returning to little or no ADM, and used car prices dropping to below MSRP. But this could all take a year or more to unfold. FWIW, I've been tracking used car prices lately, and I do see dealers doing some pretty big price drops to try to move the cars.