I've read a lot recently regarding the dropping used 996TT values. Everyone attributes this to "over production". If you take a look at things from Porsche's perspective, they sold as many units as they could at the price level that they set. I suspect that if their market strategy was to limit sales, they would have done this merely by raising prices and perhaps adding only a bit more content to stay competitive. If they had done this, i doubt that I would have opted for a new TT. I'd probably still be driving my 993 C4S or perhaps a new 997S.

Any other thoughts on Porsche's marketing / pricing strategy for the 996TT?

Cheers,

 

Well the "under priced" rational certainly makes me feel better
I think the main problem anyone would have w/this line of thinking is ...."adding only a bit more content to stay competitive".......Some would say that alot more would have to be added. They may be right, but the cost to 'add' that would not be great for Porsche.

Less cars to produce with significantly more GP per unit could easily accompllish the same product run profitability Porsche ended up with (from higher production numbers).

The owner would have benefited from higher retained value. Shoot, alot of Turbo owners threw another $10-20K (or more) at their cars after they got em anyway.........so you can't say there wasn't a market.....yes a smaller market.

So........is this the stategy for the 997TT?

 

I think that one factor no one ever mentions about the stiff depreciation in 996TTs is how many choices are out there. There are now in excess of 35 cars with factory HP exceeding 400, and several sub-$100k cars at or approaching 500 (BMW M5, MB E55 AMG, Viper, new Z06, etc.).

Long live the HP wars

 

OVERPRODUCED, 01 production alone was increased from 2500 to 4000.

 

Answer lies in your question: Porsche Over Produced the TT AND Under Priced It.

 

Neither. Production tailed off after demand tapered. There aren't zillions sitting on the manufacturer's lot or the dealers.
The used car price dropped because:
1.All cars are a depreciating asset. Sustained high values were an abberation.
2.The economy tanked with Dot.bomb New IPO's stopped giving cars to all execs etc.
3.New stuff keeps coming out (hat tip to Shark)- and they are better (and cheaper)
4.People are very concerned about increasing maintenance costs of off-warranty cars
5.The product gets a little older and less desirable, especially as the cumulatice number of similar models climbs. Take a look at South Florida. There are so many of all the Porsche model lines and years that Porsches as a whole are no longer unique. The bloom is off the rose.
6. Most cars drop more- ever try to sell a used Audi? It is not atypical to see a car worth 1/6th of its purchase price when it is 6 years old. My 1994 BMW CSI cost $102,000. 100 units were imported that year (Jan -Dec 1994). My dealer just appraised it at $9,000. A lot of that has to do with mileage, but you get the point.
7. The existent market "scratched its itch" There are just so many people who want one and can buy one. As soon as they have been satisified and move on, the market has been saturated. The Wirtz family learned that about Hockey fans in Chicago.
7. Many buyers never heard the "Tulips in Denmark" story. Their expectations were unrealistic.
That's it, since I'm starting to repeat myself. AS

 

I agree, if you want driveable art that wont decprciate much buy a Ferrari, I think Porsche should produce as many as they can sell, so what if it isnt collectible, few cars are, when they limit production needlessly car buying becomes a bigger trauma than it already is w/ dealer markups brokers etc. Why would anyone be so selfish as to think that just because Porsche produced enough turbos to fill demand they did a bad thing, the car should be available to all of us that can afford it.

 

I'm not sure why people keep asking about the resale value of the tt, 996, or any of the later model cars. If you bought your Porsche to make money on, than you made a mistake unless you plan to hold on to it for 50 or so years.

 

Agree. Another thing to consider is that the price of a fully equipped early 997TT is probably going to be over $140k and maybe close to $150k, so a 'mere' $75k to $100k for used 996TTs is going to seem much better. Then you have the cost of money issue; that cost is much higher now than say last year at this time, so for those financing the cars, monthly payments are going to be hundreds higher than for the 996TT in all likelihood pushing many people out of the market for a new 997TT. All of the above should cause the value of the 996TT to firm up a bit. That's my thinking anyway. In the meantime we have about a year before we know for sure.

Zed996TT
2004 TT

 

I vote for over produced.

 

The reason I posed this question, was for folks to ponder the business model that Porsche used with the 996TT. If you were running Porsche, what would you have done to return more shareholder value? One can't fault a company for maximizing revenues on a discretionary purchase item like a sportscar. I believe that if Porsche had taken the route of higher pricing, they would have sold far fewer units. This may have reduced revenues for Porsche, but some owners might feel that the lower numbers would support lower depreciation rates.

At the end of the day, I believe that used car values are strictly a result of supply and demand. There are too many used examples available, and too few buyers for them. Why are there so many available? Is this due to the attention span of many owners/leasee's? Keep a car for 2 years and move on? I think it's also a result of the many other competing models out there vying for their attention.

In my case if the price had been much higher, I wouldn't be in a TT.

Cheers,

 

I am so happy... all this means is that I can be closer to buying a 996TT when the 997TT comes out... not bad for us bottom feeders...

 

I never thought I would be a victim of identity theft. It's obvious you have seen my bank and credit card statements!

 

I hear 'ya. I'm happy with what I have and paid what I paid. I'm over the "what's it worth" issue until the day I sell it. I've owned oter cars and on the boards see people that are owners posting links to eBay auctions, Autotrader ads, etc. If you already own one, why sit and waste time all day looking at others? Crap, I'm happy with what's already occupying the space in my garage and need not look any more. Sort of like being married to a supermodel and still checking the personal ads.

I just don't get the fixation of what one's car is presently worth unless it's just for the "I'm better than you" feeling it gives you when you drive down the street and pull up to another sports/luxury/exotic car at a stop light.

 

nice avatar gtessier.