fast_freddy

Versus the US this is true. However, Porsche deals in Euro's and their biggest market being the US they have taken a whack on the currency. With that being said, Porsche hedges their currency arbitrage with futures like any global manufacturer of goods, so this is largely a "wash sale". As it relates to selling cars for more money in other markets take a look at the UK where the cars sell new in pounds for what they sell here in USD, but in the grand scheme of things I bet that has only a nominal impact on earnings. Truth is, without seeing their financials it's truly impossible to tell.

Like I as well as other mentioned earlier in this thread. The price on a Porsche or any other product will always be what the market will bear.

Felix

That $28K/car is the company's profit per car from all sources, not the profit from each car sale...

If you want a copy of Porsche's annual accounts try http://www.porsche.com/filestore.asp...letype=default

A few relevant paragraphs: As the equity investment in Volkswagen is consolidated at equity, pro rata net income of Volkswagen AG must be allocated
to the Porsche Group. Porsche’s share of 21.2 percent of the ordinary shares corresponds to 15.4 percent of the ordinary and preference shares issued by Volkswagen AG. The amount disclosed by the Porsche Group as income totaled 203.4 million Euro. The dividend for the equity investment of 21.2 percent of the ordinary shares held in Volkswagen AG at the end of the fiscal year amounted to 68.3 million Euro. This dividend was recorded as income from equity investments at Porsche AG. Income from hedging transactions in connection with the purchase of a further 3.9 percent in Volkswagen AG amounted to a figure well in excess of 100 million Euro.

So it looks like Porsche earned €371M from their investment in VW alone.

In addition to the operating business, the dividends from the equity investments of 506.8 million Euro, the book gain from the sale of CTS Fahrzeug-Dachsysteme GmbH and hedging results all played a role here.

George from MD

This is a very interesting discussion. My two cents:

The only new Porsche I ever purchased was in 1990- a 944S2. It had $49,900 list price. I paid a little less than $35,000- including taxes. Porsche was forced to put money "in the trunk" as their cars were perceived as frightfully overpriced and dealers wouldn't take them and couldn't sell them at anywhere near list. As I recall a 964 was over $70K list by 1995 when the 993 was first introduced and sales were still pretty bad. The 993 revived sales because it's list price (again as I recall) was slightly less than $60K- and it was a beautiful "all new" car to boot.

Compare that with the Cayenne introduction- it has never sold well despite Porsche's hype. SUV buyers apparently are focusing less on emotion and more on value. The Cayenne has little of either. First, it's hard to get very excited over any SUV, and when buyers look at features the Cayenne really comes up wanting- it doesn't offer any more than other SUVs and has always had a very high list price, incredibly overpriced options and it's downright ugly to most eyes. But because Porsche is taking a Toureag, essentially adding a badge and $20K they're probably making big $ on the ones they do sell. But I suspect they're having to put some $ back in the trunk or will have to do so soon.

All said I applaud Porsche for making $. But hearing them brag about it makes me think a lot less of the company. They should emphasize what they're doing for their customers and not what they're taking from them. It's especially disgusting to read this in Panorama as good news.

I would not buy any new Porsche today at anywhere near list- even though I could afford it. But I intend to buy a used 997 (yes I will keep my 993) and save a good $30K.

mac993

While I do agree this is interesting topic it is also an excercise in futility. The fact is we have no idea what number this 28k per car represents(NOI, EBITDA or Net) and until we do it's all speculation.

I run a business (as it sounds like a lot of us do) and can show you all kinds of "profit" in different areas of my P&L, but the end of the day its the net that matters. If Porsche can make net of 28k per car good for them. Anyone in the business world is in it to make money. If we are willing to pay it they will damn sure be willing to charge it!

RallyJon

Net before taxes, supposedly. Reading the pdf phelix linked to, it's hard to correlate it with the income statement in their annual report, which only shows 1.7 billion in net income. The IS also shows that about half a billion is due to financial income, which certainly shouldn't be included in the per car calculation.

98993c2s

Good for Porsche. A well managed company. Good for their employees. Good for their stockholders. Wish some American companies would learn how to run their businesses in a similar way.

Bull

Not only don't we know what it represents, we don't even know if it is real!

Phil

x 2
and does it really matter? I mean you cannot buy a car from the Porsche factory, you have to buy from a dealer. the dealer has a margin of profit, that no one really wants to pay anyway. THe dealer has nothing to do with what the factory charges them for the car. and then of course the usa puts a suggested retail price on the car, and anyone can go and find what the dealer pays for the car....

I have always wondered what profit I pay the local wine shop, or the local coffee shop, or the steak house I eat at.........but I don't lose sleep over it.

98993c2s

Compare:

AP
Ford may report worst loss in history

By TOM KRISHER, AP Business Writer

DETROIT - Ford Motor Co. could post the worst annual loss in its storied 103-year history when the automaker releases its 2006 earnings on Thursday.

The old record net loss was $7.39 billion in 1992, but through three quarters of this year, Ford already had lost $7 billion.

Davies

The numbers that surprised me most were the profits per car of the other manufacturers:
"Comparatively, luxury and sports car maker BMW makes about $3,200 per car. Audi nets a less impressive $1,580, and Chrysler and Volkswagen earn just $900 and $400, respectively.

Seems like a whole hell of a lot of effort building a bloody VW just to make $400.

FlatSix911

Very interesting discussion... keep in mind that the US automakers had a field day a few years back selling all the SUV's they could build...reportedly at $15K profit per vehicle at the high end for a Lincoln or Caddy truck. The market is very fickle and will change again.

Every dog has his day and this day belongs to Porsche

Wilder

I think many of us here agree that Porsche is a well-run company and that it reflects well on Porsche. I for one can relate to the second part of your sentence. Its a bit of a sad reality that we place so much emphasis on the bottom line and shareholder value at the expense of quality (as in craftsmanship, not reliability). Even "exotics" like Aston and Ferrari don't have the same feel that they used to. It seems they've lost "soul" which is much of the appeal of our 993s.

George from MD

"Good for Porsche. A well managed company. Good for their employees. Good for their stockholders. Wish some American companies would learn how to run their businesses in a similar way."

I totally agree. But Porsche got this way by providing real value and passion for the $. Unique, well built and incredibly reliable cars that stirred the soul. Going the badge engineering route (i.e.; Cayenne), failing to invest and continually improve (rather than paying dividends and overpaying executives and employees) and showing contempt for their customers (ceramic rotors aren't suitable for the track?? a Cayman is how much more than a Boxster? going to a DE or Xcross event voids your warranty?) could cause the pendulum to swing the other way.

Not that I don't like most of what they're doing now- but focusing only on the bottom line and treating your customers like crap is what got GM et. al. in trouble.

infinii

Here is more 'explanation' from Porsche as to that # and how it's misleading.

http://www.autoblog.com/2007/01/25/p...er-car-report/

Jack of Hearts

Wayland: thanks for that post. Finally, some light on the numbers. I very much like the way Porsche phrased it:

From the Porsche perspective, it is thus not serious to include the above special effects in the calculation basis for profitability per vehicle.


"thus not serious:" a cutting comment by a disciplined German.


We silly Americans would have said something like "that number is a f***ing joke."