Inventory
09-30-2009, 06:14 PM
#1
Race Car
Thread Starter
Inventory
Well on Aug 1st we had some 70 911's in stock. Here we are on Sept 30th with 8 left. We sold most of them and dealer traded some.
Inventory across the country has been selling
Inventory across the country has been selling
10-02-2009, 04:29 PM
#5
Hmmm. Cause and effect?
Dealers have less to sell
--> less people to do the selling
Factory cuts 2010 production volume
--> PCNA needs fewer dealerships
--> PAG reports lower top line
--> VW left holding the bag (aka Panamera)
Dealers have less to sell
--> less people to do the selling
Factory cuts 2010 production volume
--> PCNA needs fewer dealerships
--> PAG reports lower top line
--> VW left holding the bag (aka Panamera)
10-02-2009, 05:13 PM
#7
My business is also better now. Sales volume is still 40% less than last year, but at least it's stable and without excess of stock as it happened with Porsche and many other businesses
I am not in the car business, but I see the pattern of overstock, slower sales, etc. in many co.'s since September of last year and seems that in the last 2 months things are clearing step by step...
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10-02-2009, 09:13 PM
#9
The "fine tuning" of any manufacturer balancing supply and demand in retail is price. The concept of "discount" is just a marketing concept designed, like all marketing, to help sell the product. The price itself, as it even admits in its description, is an entirely arbitrary number that the manufacturer suggests as the starting point for negotiations in a sale. MSRP tends to move over time and has little if anything to do with actual cost of goods or operations.
Next time you go to buy or sell a house, blithely push aside any hogwash about comparable sales of nearby, similar properties and insist that you have a suggested price, but you're willing to offer an impressive 15% discount (or pay a 15% premium, if buying) this month and this month only. Let them know it will help you meet your quarterly goals. See how that flies. : )
Conversely, next time you go to buy a 911, simply explain that the reviewers consider it a vehicle directly comparable with the GTR, 3 Series and some Benz or Audi IR8 or whatever it is. Each of these vehicles, on average, in this region, sell for approxiately 30% below the 911, so you're willing to make an offer based on the "comps" with a generous premium over the fair market value. I wish you equally good luck in this endeavour, too. : )
Of course the genius team at any auto maker will try to explain that they've gone through this exercise to build a price "model" that reflects their "brand value" and the brand stature in the competitive landscape. Or some such twaddle. And the proof of the pudding is that sales are happening, people are paying numbers in the vicinity of msrp, secondary market prices fit the 'model' which asserts a depreciation curve reflecting the primary market elasticity. More piffle.
Anyway, I imagine I'm well wide of your simple question. In short, yes, I have no doubt whatsoever that discounting will be rampant and cuts will be deep. Even popular cars will be compromised and I'd expect to see the secondary market prices strengthen as dealers look to increase cash flow and replenish thinning inventories. This is not insight or wisdom, it's just the way supply and demand balances itself.
Next time you go to buy or sell a house, blithely push aside any hogwash about comparable sales of nearby, similar properties and insist that you have a suggested price, but you're willing to offer an impressive 15% discount (or pay a 15% premium, if buying) this month and this month only. Let them know it will help you meet your quarterly goals. See how that flies. : )
Conversely, next time you go to buy a 911, simply explain that the reviewers consider it a vehicle directly comparable with the GTR, 3 Series and some Benz or Audi IR8 or whatever it is. Each of these vehicles, on average, in this region, sell for approxiately 30% below the 911, so you're willing to make an offer based on the "comps" with a generous premium over the fair market value. I wish you equally good luck in this endeavour, too. : )
Of course the genius team at any auto maker will try to explain that they've gone through this exercise to build a price "model" that reflects their "brand value" and the brand stature in the competitive landscape. Or some such twaddle. And the proof of the pudding is that sales are happening, people are paying numbers in the vicinity of msrp, secondary market prices fit the 'model' which asserts a depreciation curve reflecting the primary market elasticity. More piffle.
Anyway, I imagine I'm well wide of your simple question. In short, yes, I have no doubt whatsoever that discounting will be rampant and cuts will be deep. Even popular cars will be compromised and I'd expect to see the secondary market prices strengthen as dealers look to increase cash flow and replenish thinning inventories. This is not insight or wisdom, it's just the way supply and demand balances itself.
10-03-2009, 12:09 PM
#11
That seems to be about the going rate for modestly priced 2010 Carreras. More expensive examples seem to peak out around 7.5%. I tried for 10% and found only one dealer willing to put numbers on the table to compare an '09 with an equivalent '10.
10-03-2009, 12:49 PM
#13
I think you raise several interesting points: Sales staff tend to do themselves a disservice by narrowing their field of view to too few criteria; such as "an easy sale" and they tend to work in the context of fear and greed.
Of seven local dealers -- surely too many for such a small geography -- I'd like to see PCNA remove at least three of them. This would bring these businesses up to a sustainable level of trade and customer base. And the result would be more vigorous competition and the necessity to provide quality of service as a competitive differentiator.
10-03-2009, 01:32 PM
#14
Race Car
Thread Starter
Carrera,
You wrote the following...
“I wrote "willing" not "brave" or "afraid" and the context of what I wrote was discount levels off MSRP. To clarify; I found local Bay Area dealers all tended to limit price negotiations on more expensively optioned Carreras (let's say PDK with full leather and ventilated seats as a "more expensive" spec) to around 7.5%. After that, they just weren't going to pursue a sale. I found only one dealer will to pursue a sale at more aggressive discounting.”
Where I appreciate your point of view, you’re speaking strictly about what you would like to see and what you personally think is best. Quite frankly, unless you have posted otherwise, I don’t think you’re in the business of selling Porsches. A full leather car with vented seats is a more desirable car and therefore in September of 2009 on a 2010 model does not warrant a steeper discount. There will be many fewer units produced in 2010 and the general % of units produced with full leather will be very slim. Rather than give a steeper discount on a car which will be hard to get and do it at the very beginning of the model year a salesman should expect to have a better margin in a more rare item. Your opinion is that he is not pursing a sale but perhaps that dealer’s opinion is there is no place left to go on the sale.
You wrote the following...
“I think you raise several interesting points: Sales staff tend to do themselves a disservice by narrowing their field of view to too few criteria; such as "an easy sale" and they tend to work in the context of fear and greed.”
You’ve sort of fallen into a trap which many people do. You’ve presented your opinion and then you go on to speak as if your opinion is fact. What you feel is a “disservice” and a narrowing of field probably most sales people do not, and they probably come to that conclusion via their experience in selling this particular product. Now I don’t speak for all the Porsche sales people, but I don’t work in any sort of context of fear or greed and nor do any of the sales people here. Again, your perception of “fear” or “greed” is your own and tossing a blanket statement out there about all Porsche sales people based on one single persons perception really serves no purpose other than as fodder on an anonymous message board.
You wrote…
“Of seven local dealers -- surely too many for such a small geography -- I'd like to see PCNA remove at least three of them. This would bring these businesses up to a sustainable level of trade and customer base. And the result would be more vigorous competition and the necessity to provide quality of service as a competitive differentiator.”
Again, and with due respect here, your opinion on how PCNA should conduct business and who or which business is sustainable is absurd. What study on the business plan of PCNA are you sighting? What study concluded that the Bay Area could not sustain that number of dealers and that particular number of dealers is hurting price competition. One could just as easily make a strictly opinionated non fact based case like yours, which concludes that more competition is in fact better for the consumer. The consumer then could keep his geographic search much smaller and field quotes from a greater sample. That does not even take into account better access to greater inventory closer bye.
Perhaps you should tell PCNA which dealers need to be closed and then you can tell the owners of those dealers that their business needs to be shut down, their investments lost and while you’re there address all those people who work there and their families.
Sir, with all due respect, I find your comments interesting yet bizarre but more importantly you’ve confused your opinion with fact and projected that opinion as if you speak for all.
Have a great day.
You wrote the following...
“I wrote "willing" not "brave" or "afraid" and the context of what I wrote was discount levels off MSRP. To clarify; I found local Bay Area dealers all tended to limit price negotiations on more expensively optioned Carreras (let's say PDK with full leather and ventilated seats as a "more expensive" spec) to around 7.5%. After that, they just weren't going to pursue a sale. I found only one dealer will to pursue a sale at more aggressive discounting.”
Where I appreciate your point of view, you’re speaking strictly about what you would like to see and what you personally think is best. Quite frankly, unless you have posted otherwise, I don’t think you’re in the business of selling Porsches. A full leather car with vented seats is a more desirable car and therefore in September of 2009 on a 2010 model does not warrant a steeper discount. There will be many fewer units produced in 2010 and the general % of units produced with full leather will be very slim. Rather than give a steeper discount on a car which will be hard to get and do it at the very beginning of the model year a salesman should expect to have a better margin in a more rare item. Your opinion is that he is not pursing a sale but perhaps that dealer’s opinion is there is no place left to go on the sale.
You wrote the following...
“I think you raise several interesting points: Sales staff tend to do themselves a disservice by narrowing their field of view to too few criteria; such as "an easy sale" and they tend to work in the context of fear and greed.”
You’ve sort of fallen into a trap which many people do. You’ve presented your opinion and then you go on to speak as if your opinion is fact. What you feel is a “disservice” and a narrowing of field probably most sales people do not, and they probably come to that conclusion via their experience in selling this particular product. Now I don’t speak for all the Porsche sales people, but I don’t work in any sort of context of fear or greed and nor do any of the sales people here. Again, your perception of “fear” or “greed” is your own and tossing a blanket statement out there about all Porsche sales people based on one single persons perception really serves no purpose other than as fodder on an anonymous message board.
You wrote…
“Of seven local dealers -- surely too many for such a small geography -- I'd like to see PCNA remove at least three of them. This would bring these businesses up to a sustainable level of trade and customer base. And the result would be more vigorous competition and the necessity to provide quality of service as a competitive differentiator.”
Again, and with due respect here, your opinion on how PCNA should conduct business and who or which business is sustainable is absurd. What study on the business plan of PCNA are you sighting? What study concluded that the Bay Area could not sustain that number of dealers and that particular number of dealers is hurting price competition. One could just as easily make a strictly opinionated non fact based case like yours, which concludes that more competition is in fact better for the consumer. The consumer then could keep his geographic search much smaller and field quotes from a greater sample. That does not even take into account better access to greater inventory closer bye.
Perhaps you should tell PCNA which dealers need to be closed and then you can tell the owners of those dealers that their business needs to be shut down, their investments lost and while you’re there address all those people who work there and their families.
Sir, with all due respect, I find your comments interesting yet bizarre but more importantly you’ve confused your opinion with fact and projected that opinion as if you speak for all.
Have a great day.
10-03-2009, 03:16 PM
#15
I find the Carrera and Trader dialog very interesting, with good points on both sides, and would only ask please don't get into a fight 
You are both smart people, and sometimes smart people disagree.
You are both smart people, and sometimes smart people disagree.