Mad Manx

You can't really fault Porsche, their business model is awesome.

Most of their products are at the top of their respective classes, and are virtually all built to customer order. We buy them because we want them.

More interestingly, as profits have risen, in real terms, their products have become better value.

In the UK, in 1997, a new 986 2.5 listed at £33,500 (inc tax). Ten years later the latest 987 2.7, with better spec, is only £33,170 (inc tax).

A couple of years ago there was an article in Autocar that stated that the Cayenne and 996TT were the most profitable vehicles and the 996 GT3 was the least profitable. And we should thank Porsche for the big ugly SUV because without it we might not have had the Carrera GT.

PogueMoHone

I am of the understanding that a good proportion of Porsche revenues come from it's consulting ativities for other manufacturers.

Nordschleife

iI isn't as significant as it could be.

Moe important is its ability to offload development costs onto VAG

Many years ago, I sat down with one of my bosses and discussed what car he should buy next. Rightly or wrongly he wrote Porsche off the list straight away, 'I'm damned if I'm going to buy a car I have to spend $ 10,000 on to make it the way it should be in the first place. oh, what did he buy? He bought a low milage Facel Vega and spent $250,000 having it restored.

There ain't no logic in the car business.

R+C

BobbyC

Not only the manufacturer of one of the finest engineered cars but also ace marketeer and perhaps one of the savviest financial company of any out there!

There ain't no substitute!

khaug

My austerely optioned GT3 had a sticker price of 107,780 USD. Our unfortunate brethren to the north would be asked to pay 127,024.39 USD for the same car at current exchange rates. I don't believe Canada has a VAT, so the difference is purely.....something!

When I did my first Mont Tremblant event with Rennsport, I was struck by the large number of GT3s (and GT2s, Bob) in attendance. That now impresses me even more!

Regards,

khaug

My austerely optioned GT3 had a sticker price of 107,780 USD. Our unfortunate brethren to the north would be asked to pay 127,024.39 USD for the same car at current exchange rates. I don't believe Canada has a VAT, so the difference is purely.....something!

When I did my first Mont Tremblant event with Rennsport, I was struck by the large number of GT3s (and GT2s, Bob) in attendance. That now impresses me even more!

Regards,

Crazy Canuck

No VAT in Canada. Federal tax (now 6% - was 7%) AND provincial tax (8% in Ontario) is added to the selling price of the car. That $127k is PLUS taxes.

Canada does charge 6.1% duty on German imports which is factored into the MSRP but even when taking that into consideration PCNA hoses us hosers.

MJSpeed

Need I remind everyone that PAG doesn't make a penny off of taxes...

PAG has done a fantastic job of hedging against/for weak currencies. And of course amortizing their R&D cost over three models is just simply smart.

supercup

Interesting, but you would need to look more closely at the Financials to get the real picture. First in 2005 Porshe had a profit of $750M Euros, of which only $250 Million Euros was made on the car business, the other $500M was made on currency arbitrage, mainly between the dollar and the Euro. If that held true their profit per vehicle would be less than $10K per vehicle. In additon they have other souces of income, namely parts sales, that are as profitable as cars, so now we are at $5K per car. High but more in line with other makers.

Who knows the real story, but they are definately making money and turning around and buying Volkswagon stock with it.

JCM

MJSpeed

And dumping the development costs of the Cayenne and Panamera to them...

urban_alchemist

Now THAT'S a car! If you ever happen to take some pictures, wouldn't say no...

http://www.motorbase.com/profiles/ve...;p=-1174120937

Albert Camus RIP...

Cupcar

Forbes magazine ran an article in their Feb 4, 2002 issue titled "Porsche goes Soccer Mom" and in this article they talk about the percentage profits per vehicle and they said:

• The 911 Turbo had a 45% gross margin for Porsche and cost $111,000 at the time
• The Boxster S had the lowest gross margin of 23% and cost $51,600 at the time

I would predict from this that the GT2 which is probably cheaper to produce than a Turbo would have a margin approaching 100% and the 911 Coupe which, without the complex convertible top may be cheaper to produce than a Boxster S probably has a margin greater than 23%.

Porsche is sucking us dry, they could probably sell the 911 with the dry sump GT3 engine rather than the "integrated dry sump" junker in it and still make money....I think that despite Porsches defense statement on their website the profits are staggering.

icon

where did forbes get their figures?
they reported gross and not net?
your prediction doesnt state gross or net, how are we supposed to know what you mean?
they are obviously making money but unless pag were to give out detailed information this is nothing but wild speculation.
gt2 at 100% "margin". i don't think so. we havent even heard a price yet.
as mentioned they also make profits from other sources.

Nick

Jeff don't be blinded by Porsche propaganda. The company hides so much that they refused to be listed on US stock exchanges because of disclosure requirements. They make a good car and have no problem with raping its customers. Defend them all you like. IT YOUR MONEY!

Nordschleife

PAG'S refusal to indulge in terminally stupid quarterly reporting is not based on a desire to hide information, but to avoid getting sucked into counter productive behaviour.

PAG has a much longer planning horizon than the average Wall Street analyst. A few year's ago, I spoke to the chairman of the company that invented the 'float' plate glass production process, which is now standard round the world. He pointed out that the only reason that Pilkington could develop the process was because the company was in private hands and the owners agreed to 100% reinvestment of profits in R+D until the process was perfected.

In actual fact, PAG's accounts, taken together with their other public disclosures paint a very clear picture of their operations, as any automotive analyst will point out. Of considerable interest is the amount of Development expenditure that is not eligible for capitalisation and subsequent amortisation against production. This is the 'innovation' account.

R+C