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The Porsche Tax

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Old 08-06-2012, 07:51 PM
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quick968
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Default The Porsche Tax

I have a question primarily aimed at the vendors, but everyone should chime in if the mood strikes them. Pricing of aftermarket parts is always a touchy subject, however, it's time to get some answers.

My son drives a pristine 97 Toyota Supra Twin Turbo. As many of you are no doubt aware it was a semi-limited production car with a now serious cult following. In that sense it is similar to the 996TT. It also has a veritable candy shop full of available mods from MANY reputable vendors, and it's able to fairly easily and reliably pull 500-700-1000+ hp depending on the depth of the checking account. This on a limited production car that, while spendy when new, now costs under $30K for a nice example. As an example of aftermarket goody pricing, the MOST expensive exhaust avail is an HKS Titanium/Carbon system, with nice 304 stainless tubing and great warranty and performance, and it's barely $1400.

Coming from the environment of the 968, so I'm used to 968/944 Turbo parts costs. 996TT goodies are several tiers up the pricing scale even though the cars aren't.

By way of comparison, there isn't a single aftermarket exhaust available for my 03 996TT for less than $2K, with most north of $3K, and some north of $6K and even $7K. The Akropovic Titanium cherry on top tipping the checkbook scales at $9700! For an exhaust that advertises an increase of....wait for it....17.2 or 19.6HP depending on cats! This to fit on a car selling for less than $50K. Sorry to be so cynical, but... oooohhhh.....aaahhhh. Titanium and sub 20HP gains = $9700? I just can't get there. Granted a 996TT exhaust is certainly more complex labor wise to build, but the amount of actual material used is far less than on a Supra, and once the manufacturing jigging is built, these exhausts go together quickly and easily in a production environment. These cars are no longer purchased or owned by folks willing or able to spend the $120-$150K+ they originally cost when new. These cars are now 10+ years old and are now sub $40K, or even sub $30K cars. At 10+ years old, all the aftermarket R&D work has long since been paid for. 2.5" heavy wall T304 DOM stainless runs $30.xx/foot in short lengths, 8ft lengths run less than $21.50/foot! How many feet, even with waste, are in a 996 exhaust? 5? 8ft? That's $175 in tubing. So materials are dirt cheap. As an owner, when your budget allows for a $40k car purchase, the upgrades should be now priced in line with the new reality of the cars' net worth. Yet vendors seem to think that just because the badge on the hood says Porsche instead of a "T", the cost of the aftermarket goodies can be 2x-3x -4x higher for essentially equivalent pieces. Parts are parts, sales volume is volume, performance is performance, and bang for the buck sure favors my son's Supra. So exactly why are these parts so expensive?

I'd love to buy a Speedtech, Cargraphic, FabSpeed, or EBWerks exhaust but the beer budget doesn't allow for too many champagne purchases. I can afford the car, the maintenance, and even the insurance is reasonable now because of the age of the car. But aftermarket parts are going to be slow in coming.

Vendors, might I suggest that if you want to sell more goodies, we'd sure like to buy em, I know I would; how about you take the current prices of the cars and the now-current owners' budgets in mind. Perhaps lower the prices and make less per critter, but sell more examples. "Make it up in volume" has some validity here.

Sorry for the long post, and if I'm way outa line with the observation, feel free to tell me so. I've owned Porsches in various flavors for decades, and the "Porsche Tax" gets pretty old sometimes.

Cheers
Mikey
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Old 08-06-2012, 09:13 PM
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turbo4 me
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Mikey,

I feel your pain but it is pretty much Economics 101. The cost to manufacture a product really doesn't matter. The price the market will bear is what counts and the Porsche brand is going to be more expensive that the Toyota Supra brand regardless.

An example in point would be Kevin's UMW Stage 1 tune. I believe he had it on special recently for $950.00. This is software that was written by Kevin (or somebody) and I have no idea how many hours (and cost/hour) went into the development (it really doesn't matter). What matters is that there are a fair number of 996 Turbo owners willing to pay Kevin $950 for these lines of code (and based on the comments apparently most feel it was a fair deal). If Kevin tried to sell $950 software to Toyota Camry owners, he probably wouldn't come out so well (even if it made the Camry into a rocket). The market demand wouldn't support the product.

I sure hope Kevin doesn't raise the price on that tune. I haven't bought it yet...
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Old 08-06-2012, 10:26 PM
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neanicu
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I agree with everything you said here! Even though I can afford it I choose to stay stock. No headache. The 996TT is plenty car!
Just do something similar to a Gundo hack they've been doing on the 997 forum to make more noise,lose a cat,tune the computer so you don't have a CEL and get the 997SSK and you'll probably be more than happy and stay within budget.
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Old 08-07-2012, 12:26 AM
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Anybody moving into a Porsche that is of the mod persuasion should have done their homework before jumping in to the pool of insanity. While I agree that most upgrades are overpriced relative to many lessor marques, they are in line and/or cheaper than other high dollar cars. While there may be some sub $40k and sub $30k cars out there, many more cars are selling far above that.. mid to high $40's and low $50's are not uncommon.

The plus side of the Porsche tax is that it is very solid. Being as my wallet isn't that deep, I've learned I can upgrade my p-cars and then recoup my money later on when I sell it. I've always saved my stock parts and then returned my car to stock when it's time to sell. On my last car, a 993 C2S, I actually made a little profit. Not sure that will happen on the 996 but I bet I'll be close to breaking even. For me, this is all part of the fun of being an enthusiast.

YMMV
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Old 08-07-2012, 12:42 AM
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Yeah modding isn't cheap and not for everyone. I went overboard by most standards but I did what I wanted and did it right, it's my car. If you look for exhaust there is always used stuff which means in most cases it's been used for 3k miles, keep on searching. The options are endless for this car. If you need ideas or help PM me
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Old 08-07-2012, 02:11 AM
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One thing that has helped me significantly with the price of Porsche Turbo parts was to own a Turbo charged airplane. After spending huge jack on Cessna parts, the Porsche parts become reasonable. It all depends on your perspective.
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Old 08-07-2012, 02:25 AM
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The reason the EBwerks is "expensive" yet it is the cheapest one in the market for a 996t, is because the initial cost of R&D etc ( we just started a few months back). Then we have to calculate how many we expect to sell and we can only get a certain discount at X quantity. If the 996T was a new car, I can have quantity to make 100 exhaust and get a massive discount and lower the margins drastically. We had in mind of only selling 20, and that is what we calculated for our prices. I don't think I'm going to sell more then 20. I don't think theirs more then that many people who want a GT feel for a turbo car. Also for the base at $1900 shipped to your door in the US that is pretty damn good. Again, supply demand, if we had 40 system we thought we could sell, that number would drop by a few hundredth dollars, but the market is saturated with exhaust so we know it will be very difficult. We are not out there to rip anyone off. If customers want cats, we literally just add the cost of the cats ( not even labor, or extra flange/bungs etc) to the cost. Our margins are much less then most people think as a small company. A Company like Akro, or some of the other big ones you mention, yes they are making a good margin per exhaust but they know very few people will buy it so they have to accommodate the price.

I have a spreadsheet of the initial cost we have had for our 996/997/rs4 project and hard to believe, but things add up quickly. I find it hard to believe we are already in the 6 figures in expenses. It cost money putting things in production, and get the right people to make things. I get more joy in seeing people enjoy a product that Ben and I put together then counting the money I make. Per hour put into this company vs my daily job, this has much lower pay- but I love going fast. I.E i'm working on CF carnards that are going to retail for 20% of Porsche's 1000usd for them. So to me this is a passion. I get a good kick knowing people around the world are enjoying driving there turbo thanks to me. More satisfying then money can buy. Plus the exhaust you mention at that price, they can be made in China/ Taiwan. You can try, yourself if you like. But they will require tooling cost, and a min quantity. When you have 1000 exhaust you can order and you demand will be there, then yes prices drop drastically. But if you want it made in the U.S , Solid Works drawings, transferring all that data on SW to whatever the code the machine can do/cut it gets freaken expensive per hour. Example. our RS4 tip took ,4 days to get it right at our suppliers CNC shop. That is with me providing them the code for their machine/drawing. So many revisions that need to be made as we went along and found out, and at shop rate because they need to make a living too- each tip cost us about $150 usd. that is with Ben, my partner doing 70% of the work - not including, brushing and Anodizing. I could have done the tips in China for a fraction of the price but I like creating jobs here locally in SFBay area.At the end of the day, I know the Q.c is closer to what I liked. The Chinese make great stuff no doubt about it. Maybe it depends on where things are made ? I'm sure in the midwest living expenses are much less which brings down the over all cost. Unfortunately I live in the San Francisco Bay Area, one of the most expensive area's in the states. I have a family business in the service industry for manufactures- I can tell you , fortune 500 companies are willing to go to Mexico, China, you name it to save $10 dollars a part, or maybe not even save -- but initial start up is easier and cost less. The biggest cost is labor, that is why things are expensive, and us Americans are not willing to pay for what Americans get paid hourly, so those jobs go elsewhere, create jobs elsewhere. So this all comes down to the consumer why our jobs are getting outsourced for the most part. In my other business I have traveled to other manufacturing competitors of mine, oversees because these fortune 100 companies want me to improve their Q.C, and product. I, knowing they are trying to out sourced me, and want me to perfect this new facility of this other company for them. How funny right ? I'm sure theirs multiple of these products each one of you use on daily bases, of the companies that i'm talking about and i'm part of their supply chain.




Enrique

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Old 08-07-2012, 03:41 AM
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Originally Posted by turbosjedi View Post
One thing that has helped me significantly with the price of Porsche Turbo parts was to own a Turbo charged airplane. After spending huge jack on Cessna parts, the Porsche parts become reasonable. It all depends on your perspective.
Oh I'm hip to that perspective all right. My other "hobby"......trust me Cessna parts are a distant second to Beechcraft parts. However there are reasons aircraft parts are so spendy as you know, mostly having to do with product liability.

This still doesn't explain why vendors charge the prices for goodies now that they did when the cars were new. The R/D is long since amortized, the cars are now selling under $50K, yet the parts are priced right with the new 997/991TT goodies.

Look, I am ALL FOR vendors making a reasonable profit on their work, they have bills to pay and mouths to feed just like all of us. But $9700 for sub 20HP gains is roughly akin to comparing a hamburger selling for $100 at the Ritz Carlton vs $8 at Carl's Jr. It's still just a nice hamburger. The $100 price simply isn't justified by the R/D and ingredients cost. It's the branding you're paying for.

And Enrique, that wasn't necessarily aimed at you personally. You guys just started I realize, and your system is actually near the lower end of the scale. My bad for throwing you under the bus.

I realize this pricing is a perfect case of glorious capitalism on display, but that doesn't mean I have to like it,....or pay it.......even though I really want it.

Cheers
Mikey
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Old 08-07-2012, 07:14 AM
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buy a 996tt already modded. im going to see a stage 2+gmg built 996 on sat. the cost of the car with the deal i made shows the entire 30k$ build is.... FREE! best way ever to buy mods
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Old 08-07-2012, 07:15 AM
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A Bonanza is now a $650,000 airplane. Parts are directly related to the cost of the aircraft. I also agree, parts for a plane are stupidly expensive due to the incredibly stupid "deep pockets" aspect of US liability laws. Brake rotors for a Lear 45 are $50,000. Each!
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Old 08-07-2012, 09:09 AM
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Toyota Supra Twin Turbo similar to a 996 Turbo

Saying something like that over on 6speed might be considered acceptable, but here ...
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Old 08-07-2012, 09:14 AM
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Mikey what do you do for a living?
After i feed my new born baby I'll dive into this discussion but the phrase " you pay to play" comes to mind :")
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Old 08-07-2012, 10:15 AM
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So lets see, if you want to buy cheap stuff there is companies out there but it also goes along the lines of you get what you paid for which in most cases the cheap sh*t is badly made. It never hurts to ask a vendor for a discount worst case scenario they say no, at the same time do you expect people to come to your work and always ask for your services cheaper since you been doing them for so long, no you get paid what you expect in most cases. A lot of sites have great sales and parts/pieces are on discount, winter time is best time to buy performance mods since most Porsche owners hide their cars for the cold weather, fail. I also mentioned before used parts, you can buy them most of the time with no worries as long as the member is verified and has been around for a while or simply ask for references. The always first mod, exhaust, it makes a world of difference and there is probaly some 15 -20 different options right now. I have heard or had about 6 of them from different vendors and let me tell you even the expensive stuff at times has issues. In the most recent I had straight pipes but with my new baby girl I decided to get an exhaust and spoke to Enrique about his EBwerks exhaust. Needless to say I purchased it and it sounds marvelous, it's a mix between a gt3 and a turbo, yes there car be a sound like that, glorious. I have buys chase me down to red lights just so they can complement the sound of the car. It's made very well, fit and finish are very nice and sound unlike any other TT exhaust you will by, I will vouch on that. Oh yeah it's also the least amount of $$$ out of anything on the market, great service and super fast shipping. I only feel bad that I haven't done as much raving about it as I should have but baby coming 2+ weeks early will do that. Bottom line is stop crying about prices it's Porsche and it'll cost money, wait until you do other major maintnance and see how much some of the stuff costs , get your tissues ready if you do not have warranty. In all seriousness if you need help or ideas PM me and I'd be more then willing, sarcasm aside. I've had my TT for 3 years, had it fully apart and just stopped modding it..for now
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Old 08-07-2012, 10:18 AM
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Mikey how much is your insurance in AZ for the car if you don't mind me asking, I'd be curious to compare with NJ.
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Old 08-07-2012, 01:32 PM
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Enrique - don't forget, you didn't do this - Obama
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