First off, even the low performing dealers and anyone off the street with an allocation is charging ADM. But more importantly, how exactly is PAG benefiting from money being funneled to the high performing dealers?

 

Dealers would used to get trunk money in order to move cars that were hard to sell (e.g. Panamera, base Cayman etc.).

Trunk money would have to show up on the PAG balance sheet, however.

Instead of allocating trunk money (a cost to PAG on the balance sheet, which lowers overall revenue and therefore profits), PAG instead allocates a high demand car, like a 911 or a GT car, which both PAG and the dealers know they can skim off some extra $$$ that comes directly from the consumer, and not PAG.

This is how PAG benefits from ADMs.

 

Porsche absolutely has control over allocations they make available to a dealer. If not, every dealer would be able to offer a build allocation to every customer who put a deposit down and we know that isn't the case. I'm sure Porsche has a process for allocations but the reality is they also have discretion.

My point really was just that IF Porsche REALLY wanted to stop ADM's, they could. They don't because they choose not to. The excuse they are all independent businesses is true and what is also true is the dealership agreements still give the manufacturer a LOT of control over the most important asset of a dealer... its inventory (not to mention many other things). ADM's are a dealer's decision but turning a blind eye to it is backdoor permission from Porsche also. Anyone who thinks Porsche has zero ability to influence this are wrong IMO... they just choose not to. BTW, I have no issue with ADMs... it's a supply/demand/market thing. If everyone refused to pay them, they would go away. People are willing to pay it so dealers charge it. No harm, no foul. Just business.

 

Porsche can somewhat influence dealers to try to get them not to do ADM. But ultimately, Porsche can’t stop ADMs directly. Indirectly, Porsche can either increase supply (which seems to be a case of can’t and won’t!) or increase MSRP pricing which is the approach they’re taking. People are gonna be priced out (weather due to sheer purchasing power or preference) and ADMs won’t exist forever with MSRP pricing going up so much.

 

Exactly - on both points made. If you are a manufacturer - or reseller - of goods and there is more demand than supply for your product at MSRP, why would you ever sell those goods for less than the market clearing price? Likely nobody here would or they would not be in a position to buy a 911. MSRP is a benchmark and it is a fairly inflexible one as it only changes once a year. The market changes daily and the sales price adjusts to reflect that. It's just that historically that has always been in the amount of discount off MSRP as opposed to ADM. The primary reason for that is the the psychology of consumer behavior: most people would more readily pay $55,000 for a car listed at $57,000 than pay $54,000 for the same car listed at $53,000. All you have to do to see that is to read all the threads on ADMs.

 

Exactly! This is why Porsche is coming out swinging with this MSRP raise. They must think this will bring an end to ADMs (this and the looming recession, which I know someone will say 911 buyers are immune to, but surely some folks will get prices out; my dealer already told me of a few examples of people backing out when their 911 arrived, giving reasons that included their business is going bankrupt or whatever).

 

They don't care about the ADMs, in fact Porsche (quietly) wants them to continue because it keeps the dealer network happy. They raised prices because they can, and want the profits now as a public company, and they don't have to invest in any additional production capacity to get those profits by selling more cars. It's pure gratis for them. And it's not just Porsche, this seems to be the new business model for every product you can think of - the supply side has vanished, you make profits by producing less and extracting more cash from the end customer for what you do produce. Go try and buy a Subzero refrigerator, same exact business model as Porsche.

 

And the Sub Zero I waited a year for is a piece of ****. Ice maker clogs every few days, ice all over the kitchen floor. It's a great time we live in.

 

Opps. Wrong thread

 

I have a subzero from the 80's I can sell you. $10K.


Let me know.

 

I'm having my 20 year old one overhauled, should last another 20 years. But hang onto that old one, they don't make them like they used to, with proper maintenance it will run a very long time - the new stuff with all the environmental regulations, aren't so great, and are $14K to start.

 

I did the same with my '98 model Sub Zero last year. Rebuilt with new compressors for about 1/4 the cost of a new one and didn't have to wait a year. It's a little loud, but it keeps on working.

If I had a '98 911 in the garage already I probably would have done the same thing lol!

 

I don’t fully disagree, but it’s still economics at the end of the day. At some point, buyers go buy a sports car from a different brand who’s willing to produce more and make more profit. It’s all simply economics and it does play out in the real world.

I just bought a Sub-Zero! Apparently they discontinued the current model because they’re about to come out with a new model (only slightly changes the interior). Company found one dealer with one unit left of the kind we wanted so it wasn’t easy to find, that’s for sure. Have you tried submitting a warranty claim under the 3-year warranty it comes with? (I think 2 years if you didn’t use a certified installer).

 

2 year old brand new KitchenAide with a brand new build house and we are on trip #6 for the ice maker, complaint #3 with Whirlpool/Kitchenaide, and ours does the exact same ridiculous thing. Pisses water everywhere, clogs every two days, you have to beat it with a fist to get it to release from the door....and on and on.

Super fantastically all warm and fuzzy over it. At least the P-Car is doing better than the fridge!

 

Maybe you got a lemon! Had Kitchen Aide built-in fridge for 3 years and only problem was the LED light went out.