PogueMoHone

Don't forget:

The Carrera Gt was originally estimated to sell around $350K with no more tha 1000 cars built. That is indictative of it's value. Are we suckers to pay more?

Porsche got greedy (and got sucked in by speculators) and raised both the price and the supply, causing serious concerns to loyal customers.

In Leipzig, I was amazed about the doubts about this car, not that it wasn''t a great car, but that the marketing of it had been seriously scewed up, raisinfg the price and raising the production volume had negated all the previous selling efforts.

Sometimes less is more.

At less than 1000 cars I was buyer, but at 1500 I'm walkiing. Now given all the cancellations I wonder what the true (production) number is? Just an example of the fear, uncertainty and doubt that Porsche has created. By the way they managed to do the same thing with the GT2.

When will they learn (I hope some of their Harvard MBAs read this)?

If this Company loses it's independence then they only have themselves to blame.

graham_mitchell

Isn't it to your advantage to have more sold, up to a point? More cars made means more parts sold which may help to keep the production of certain spares viable. The CGT is never going to be a common sight on the roads.

PogueMoHone

I have seen more Carerra GTs on the road (3 to date) than I have seen GT2s or GT3s (maybe those spend all their time at the track).

W8MM

In 2001, when all the marketing planning was going on, what was the Euro worth? Porsche always said that the car would be priced below Eur 400,000. And, it sells today for Eur 390,000.

Eur 390,000 could be bought for, at the point in time when prices were being discussed, around US$335,000. That's where the estimated price we all heard from USA dealers had its origin.

Now days, that same selling price in Euros is around US$510,000. When Porsche went to tie down the US$/Euro hedge for the entire Carrera GT production run, the price had to be adjusted to US$440,000 to account for the huge movement in exchange rates that had happened since the project was launched. See for yourself at the Federal Reserve site (click me).

I think it is inaccurate and unfair to call Porsche greedy for not absorbing the currency exchange trading losses for half of the entire production run of a most unique, very expensive car. Would we have been better off placing our orders in Euros? What American customer would put up with a pricing scheme like that?

Saying that Porsche's greed should take them to their just deserts (the poor house) just plain misses the most important ingredient in international business -- the value of the trading unit.

PogueMoHone

I knew someone was going to raise that (weak $) argument. However, I don't think it's valid, but it depends on your starting point. The high $ in 2001 was always artificial and everyone knew it (or should have). Conversely the Euro was artifically weak.

The Euro was introduced at around $1.17 (it's intended target), so the argument about the strong $ and then the weak $ losses it's sting. Porsche has sophisticated money managers (I hope) and they can manage these fluctuations.

So, if you take the true starting point of the $ value you get quite a diffferent result than if you do the conversions at some artificially higher point. Any potential gain/loss depends on your starting point.

I never said their greed should take them to their just desserts (the poor house), but it has done in many Companies.

How about the # to be produced, the weak $ made them do that as well. I don't think so, their own dealer network was speculating on the cars, hoping for "Enzo" like mark-ups. That's why you see cars floating around now, and available, because there were never true buyers for them (but the production volume got increased). It's only going to get worse. It doesn't seem like Ben can get rid of his car at a discount. Why?, I think "buyers" smell the kill and think the prices will go lower

I can't remember how long ago I put down my deposit, but it seems kind of ridiculous that we were told we had to do it; now, it is relatively easy to secure a car! Guess I missed the value of my trading unit on that one, should bought Euros instead

Porsche is missing the value of their true trading unit (buyer emotion), if you reduce it to mere $ they lose, because the passion is gone. And, there's an A$$ for every seat!

With this car, all I'm saying is they should have come out and said:

We're building X cars at Y price. Hedged the "currency risk", if any, and made it special in the market place

Instead they waffled, now nobody knows what they have, or how many they will sell, or what they're buying.. I repeat sometimes in business less is more, and that's how you command a premium.

I'm not anti-Porsche in any way, but they have been incredibly stupid and greedy with this car, and certain dealers in their network network have been in lockstep with them along the way. Now the chickens are coming home to roost!

It's only an opinion, but right now given what I perceive to be the softness on this car I think as supply increases over the production run it's going to get worse. Since I think I understand the value of the "trading unit" as well as anybody why wouldn't I wait, since there is very little downside risk.

I don't speculate in cars, don't expect to make money of them, but I also don't need to spend $450K on something that is instantly worth $375K (or available at that price). What are the Dealers offering for used C-GTs, they probably won't take them because of the $ involved unless they are very sure they have someone already lined up.

Will they cut production?, and create more value in the car. I doubt it, but I hope so. They know who their true non-speculating customers (like me and you?) are, and how to reach them.

I think they got greedy and killed the "golden" opportunity to have something really special.

W8MM

I don't recall that Porsche ever said they would limit production to 1000 cars. Wiedeking said that they needed to sell a minimum of 1000 cars to make the project viable. And, that if the CGT were to be approved, it would have to make a profit.

If you see three at every street corner with 1500 total production, you would still see two on the same street corner at 1000 cars produced, no?

Cincinnati is virtually crawling with GT2s and GT3s, but I have yet to see a single Carrera GT on the street.

Carrera GTs only have $25,000 dealer markup. How is a dealer going to want to discount the car $75,000 when he will end up eating $50,000 of that? All the dealers had to put up $50,000 deposits per car when they accepted whatever portion of their allocation they chose. Would they chose to walk away from their deposits just because some prospects are worried whether all 1500 CGTs will sell through? That's what markets are for and tends to focus their minds.

If a dealer is allocated 3 cars, sells 2 for MSRP and discounts one to $375,000 to move it, what good has it done them to even sign up for the first car? They'll lose money on the whole experience when the service tools and technician training are taken into account. Where is the motivation to sell at such a steep discount?

When I asked my dealer what their thought process was, they explained that they wanted signed contracts on all except maybe one speculation car. I asked them what they thought of the 1500 unit total run. They replied that Porsche was very careful in their marketing projections, but, in any event, they thought that every CGT built would eventually sell for MSRP.

Now, if you're talking used cars, I don't think enough sales have been recorded to establish the street price for a pre-owned CGT. Larry B's sold for way more than $375,000 with 4,000 miles on the clock.

I guess we'll see who is correct in a few years time.

alexpapas

I posted this thought in other forums, but at this price level supply/demand will determine how many cars will be produced. I doubt that they will be able to find 1,500 worldwide buyers at current pricing.

Ferrari's Enzo is a good case to look at. Supply has been limited at 399 units and consequently the car trades well above its MSRP of approx $660,000 ( but starting to drop significantly over its highs). I believe that If Ferrrari had announced a run of 1,000 cars they would not have been able to secure that many orders at over $600K.

I also believe that Porsche has a different philosophy regarding value maintenance of their cars. They do not actively pursue this as a goal. It's part of he reason why the CGT is my first Porsche ever. There are simply too many 911 shaped cars out there for them to be meaningful balance sheet items. They are just depreciating cars - nice cars, but depreciating none the less.

Sloth

There was an artificial demand created by dealerships speculating that the car would sell at significant premiums. The speculators in addition to those that really want the car has lead PAG to the wrong conclusion that there are really buyers for 1500 CGT's. PAG did say they would build as many as they could sell... but the problem is that they are not all really sold. I think short term they will take a hit, but long term they should hold their value

PogueMoHone

"they thought that evry car built would eventually sell for MSRP"

How many will they build?, at 1500 they will not all sell for MSRP!

If the demand is really there, then I don't think the dealer would be "sticking" Ben with his car. It's obvious that that Dealer or his friends in his network have no home for this "orphan", and we're barely into the second of 3 years production. I see trouble on the horizon, but recognize that prognostications are often inaccurate.

My own bias is I would like to see production drop.

My projection on future vale was an example only and a "guesstimate". Interesting that your dealer was openly speculating. I wonder how Porsche reacted to that, reduced allocation or nod/nod, wink/wink?

One thing is for sure as more cars are available the value goes down. I never suggested that the dealer would sell it (willingly) for $375K I know they don't have that much profit; but when the customer has the car let's see what they can get for it in the used market (again as the supply grows). Economics dictates that no dealer will tie up $300+K to make $10 or $20K potential profit, when the same $ could turn 5 or 6 regular cars with $5-46K profit (and much less risk). Guess who takes the hit...the guy wanting to sell it, that's where my $375K came from.

Notwithstanding the above the C-GT is a fantastic car, as is the GT2 but that doesn't equate into fantastic value.

ben in lj

I know a dealer who is considering doing just that - walking away from more than 6 $50k deposit/allocations put up in his own cash!

ben in lj

[QUOTE=Colm]"If the demand is really there, then I don't think the dealer would be "sticking" Ben with his car. It's obvious that that Dealer or his friends in his network have no home for this "orphan", and we're barely into the second of 3 years production. {/QUOTE]

part of it is that this particular midwest dealer is a pissant small timer who wants the "punch" which equates to 4 high line allocations for every CGT they sell (all 1 of them!) - has to be put in a retail buyer's name vs. a dealer. further, i doubt they can even afford to carry the car if they were to act like every other dealer in the country when a customer cancels the CGT. the double edged sword of dealing with a small timer to get what was then a rare early allocation has come back to bite me in the ***.

graham_mitchell

I must live in the wrong 'hood! I see a GT2 or GT3 nearly every week but can't even find a CGT to look at

ringmeister

Me too, I see GT2s and GT3s all the time. Yet to see a CGT. If they build 1500 that's roughly twice as many GT3s. They'll be all over the place.

ben in lj

I kinda doubt the avg miles on the CGT will be nearly as high as the avg miles on the GT2 and 3s.

ringmeister

What a shame.