Raptor

11.90% translates into about 25% of MSRP (assuming "invoice" is what the dealer pays Porsche AG).

MichaelL

Overall figures for Porsche AG's business include 3 model lines, racing, R&D, world-wide distribution, engineering services, workforce benefits, corporate expenses and many other factors that we are not privy to. Speculation as to the true production cost and profit of the Carrera line is nothing but SWAG (scientific wild assed guess). It is no better than the assumptions and methodology used to generate it. Using questionable, inaccurate figures to criticize list prices is fundamentally unfair and serves no useful purpose.

sato

Doh!!! You are correct sir. In error I assumed you were referring to a simple difference between revenue and cost, whereas you meant the more precise gross profit margin. I assume then that your 20% margin is operating margin, or is it net margin? As far as dealer cut, that was my inelegant way of highlighting that what the dealer pays at wholesale is not the cost of goods to the manufacturer. The "cut" thus being the difference between wholesale and MSRP. So in reality Porsche would not book the entire revenue from the retail sale but only from the wholesale to dealers.

fast1

The "cut" thus being the difference between wholesale and MSRP. So in reality Porsche would not book the entire revenue from the retail sale but only from the wholesale to dealers.

Porsche only can book the actual price that they get from the Dealer. Let me repeat this point: Porsche sells the car to the Dealer at wholesale. What retail price the Dealer is able to get has absolutely no impact on Porsche's bottom line. The only exception would be if Porsche Dealers are stuck with an overpriced model that can't be moved. Porsche may then offer the Dealers a rebate to help them move the car. A good example was the rebate offered by Porsche on the 40th Anniversary edition 996.

fast1

I'm not certain what your statement means.

searching4996

"Working backwards from a base 997 at MSRP of $71,300 (I can't imagine an S costs much more to produce), dealer invoice would be $62,000 and Porsche cost is around $48,000. Actually, it wouldn't surprise me if the true costs are considerably lower such that it costs Porsche half as much as MSRP to produce, therefore around $35,000 per car."


I think the fellow who posted these numbers is pretty close to on the mark. Porsche makes a NET margin of 11 %, virtually unheard of in car manufacturing. To do so they would have to have a gross margin close to 35-40%, or sell a hell of a lot of cars to spread out the r&D and other costs. That's how a corvette z06 can have so much built in and still cost less than a 911. Even though there are better values out there in cars, we'd all still rather have a 911

sato

Don't you know it! I'm on the hook for whole enchilada: X51, PCCB, GT-Silver, Terracotta. Just another fanatic blithely contributing to the bottom line.

fast1 - We are in agreement.

searching4996

It's Unanimous!

TT Gasman

Not sure about Porsche, but it only costs Ford about $10K to build an SUV (same as a truck) and the rest is pure profit. That's why they can sell them for $12K below sticker.

Flying Finn

Very true, hard to find that info.

Information I have is that 996 was almost 50% cheaper to build than 993 and 997 is cheaper than 996. Just the car itself, not marketing, shipping etc.
Some of that is from the parts, "just in time" (that they actually started on 993 alread) and all kind of not car related stuff (i.e. shutting the lights in the "shop" when there's no one in etc.

50% sounds really high I agree (and can't really confirm that) but I know 996 was a lot cheaper than 993 to build.
You can check what new engine costs from Porsche and that already tells there a big difference (I remember it's something like $30k for 993 vs. $10k for 996 but please someone correct me since my memory on that one is vague).

So, while there's no real info how much, for sure profit / car is a whole lot more nowadays than what it was 10 years ago.

fast1

You can check what new engine costs from Porsche and that already tells there a big difference (I remember it's something like $30k for 993 vs. $10k for 996 but please someone correct me since my memory on that one is vague).

I'm not certain what Porsche charges for a 996 engine, but I am certain that it's a hell of a lot more than $10K.

Flying Finn

Like I said I'm not sure but quote from RUF's compressor kit for 996 & 997 says following:

"Please take care of the milage of the engines:
- Up to 40.000 km no special check necessary
- From 40.000 km to 80.000 km we check the engine for the possibility of guarantee and replace the necessary parts
- More than 80.000 km we recommend a replacement of the engine:
p.e. 3,4 l Engine M96.01: € 5.870,-"

That sounds low IMO but I don't think it's a typo of € 58k either.

Anyone have info on 996 engine replacements and the price?
Ton of them have been replaced by dealers and was hoping someone would know the price.

Raptor

fast1 --- Assuming a MSRP of $100,000, the dealre invoice would be about $85,000. If the dealer pays Porsche Ag the invoice amount and if Porsche's margin in 12%, then it cost Porsche about $75,000 to make the car that they sold to the dealer for $85,000 and which the dealer posted at $100,000. Admittedly these are very rough, but that is the basis for the statement that the "cost" of a car is about 25% less than the MSRP. Of course, the 12% margin is simply one that was suggested in this thread - I don't have a clue as to its accuracy, or to the actual "cost." This was just a minimal suggested delta off MSRP.

NiteJav

I think where Porsche really makes their money is the options. They nickle and dime you to death. 360 bucks for a rear wiper?!?!? Porsche makes good money on their cars, they make great money on their options. Someone should price out the true cost of those options versus what they charge.

Raptor

The option issue is really a strong point. A well-optioned 997 has about 20% of the MSRP in options - many of which are standard on other cars. Options on my wife's new Jeep were about one-half the cost of similar options on a 997. Granted this is apples and oranges but the leather is not Connoly and the Nav unit is less robust and the power seats are not that unusual and the sound pacage is about 4 times the cost os a similar after market package and on and on. Yeak, I know, if I'm spending $100-$125 M on a car what's the diff. Just that the options are a rip!!!