1crazy canuck

How will the Porsche dealer network survive 10 years from now when the vast majority of new cars they sell will be electric and require little maintenance. (like Tesla)

With Tesla owning all their Service centres they control the costs and keep the parts and service costs to a super lean amount.

with over the air updates - and limited reasons to go to the dealer -- will they even be around for guys with 997's, 991's, & 993's and older to go to ?

tcsracing1

i serviced my 1991 turbo at dealer last year... Im sure my 2008 997 turbo will be there for something 20 years from now

chuck911

I don't know which is funnier- the idea that in just 10 years the vast majority of cars - no wait not cars, Porsches!- will be electric, or that Tesla has anything even remotely like a viable business model anyone (let alone Porsche) would want to emulate.
I mean, Tesla is so done-for they just laid off 9% today, with Elon so clueless he wrote in the layoff announcement that, "We've never been interested in profits." The understatement of the millennium!

The man can't make a car at a profit to save his life. I seriously doubt Porsche has anything to learn from Elon, unless maybe they want Not a Flamethrower as an anti-carjacking option in their South Africa market.
No, wait, even then Porsche would do it better.

Thanks, you made my day. Just hilarious!

bdoviack

Not sure why you are so anti-Elon Musk. That guys accomplished more than probably 99.9% of us ever will (PayPal, Tesla, SpaceX, etc.). Yes, they did lay off 9%, but guess what, their share price went up the same day. Like him or not, he employs tens of thousands of workers in the USA in high-value industries (aerospace, automotive, etc.). He could have cashed out decades ago with his 100 million he got from PayPal.

Is it a coincidence that the Germans are now investing billions in electrification? Do they and Tesla know things we don't (amazing battery tech in the pipeline?). The Germans aren't dumb. They're investing $7.4 billion into electrification so perhaps they feel Elon is onto something.

http://www.businessinsider.com/porsc...worried-2018-2

Fred V

Most of the profits in a dealer come from the sales side, not from the service side.

hacker-pschorr

The timing of the Porsche Classic Division isn't a coincidence. I suspect as the Model E production ramps up and takes off, you'll see more and more dealerships upgraded to Classic status:
https://www.porsche.com/usa/accessor...assic-partner/

You have some solid numbers to back that up?

Fred V

I unfortunately don't, but I work in sales in one of the biggest canadian dealers and I can tell you this was confirmed to me by every canadian manager i've spoken to. I think it's pretty standard in the industry although I haven't worked for other brands for very long. Might be different in the US, that I couldn't tell you.

wizee

daveo4porsche

My 4 year/50,000 experience with my Model S is as follows:

1. brake jobs are nearly non-existent - 250,000 miles minimum - properly driven regenerative braking takes most of the load - my Model S P85D has 50,000 miles on it and we've worn 5-8% of the brake pads…the Tesla forums have standing threads for anyone who's done a brake job on a. Tesla - there are reports of 400,000 miles Tesla's with 50% pad wear…very few Tesla owners have done a brake job ever...number of people reporting a brake job is measured single digits (even at the Bay Area service centers when I've asked - the Sunnyvale service center has their original order/stock of 200'ish Model S brake pads still on the shelf from when they ordered them in 2013…they used 48 pads in that time)
2. Suspension parts are rated for 100-200k miles before needing any maintenance
3. Battery coolant is replaced on a chevy bolt every 150,000 miles ($175 dealer service) - no recommended/required schedule published by Tesla for battery coolant.
4. Windows and doors are like all cars
5. 12 volt batteris (To date all electric cars have them for compatibility with existing 12 volt car gizmo's) need replacing every 2-3 years
6. Gearboxes and differentials are rated for 250,000 miles between services
7. in reviewing a years worth of a service invoices from my local porsche non-dealer mechanic 85% of their service business disappears with an EV, and the service business that is left is a "consumables" business which is less profitable - in all honestly and horror the Owner of the shop says his business in unsustainable if his customers all move to EV's - he is quite pleased about the slow uptick in EV sales for his personal business, but is considering an EV for his personal use given it's lower costs to maintain - ROFL.
8. tires wear about the same on an EV as a gas car - perhaps faster - you replace those on the same schedule - Wheel Works and various tire shops have nothing to fear - Jiffy Lube is toast and a goner in an EV world.
9. wiper blades get replaced just as often.
10. the main traction battery can be replaced, but doesn't need to - there is a myth that these batteries will simply stop working, and while that's possible it's not their design, what does happen is they "degrade" and lose capacity - so what may have been delivered to you as a 85 kWh battery - after 8-10 years may be a 65 kWh battery - but it still works as a battery, but yes it holds less electrons - the time period in which this occurs is much longer than average car ownership - and the battery can be replaced/refreshed for about the same cost as a transmission job for a similar number of miles driven. A refurbished Nissan Leaf battery is $3200 installed and beneficial for the restoration in driving range after about 8 years - but not required. Nissan leafs lack active thermal management for the LiON battery so they have the worse battery degradation in the industry. EV's with active thermal management (Ford, BMW, Chevy, Tesla and others) see far less battery capacity loss and therefore the replacement cycle is far longer.
11. I have lost 2% maximum capacity on my 85 kWh battery in 4 years - or about 1.7 kWh or about 6 miles driving range on a full charge - I expect to lose another 3% in the next 4 years - or another 8 miles driving range, for a total loss of 14 miles of driving capacity over 8 years of ownership.
12. Brake fluid should be replaced every 2-4 years - this is a $150 Tesla service, and a $120 Chevy Bolt service from the dealer - EV's have no magic here
13. and yes I've had my sun roof adjusted/lubricated under warranty - but it would've been a $250 service if I had to pay for it.

In talking to most dealers, people who have worked for dealers, and general internet wisdom - a new car sale for a dealer is a 8-12% margin for them, but 60-70% of their revenue is their service bays - A chevy dealer will make about $3,500-$5,200 profit on selling a $65K Silverado, but the 6 year service costs for a Silverado are $12k - $18k in service costs to drive the car. Dealers make more on service and used cars than they do on new car sales, but new cars sales are very likely to return to the dealership where is was purchased. The 8 year service potential of a Chevy Bolt is about $2000 - tires and the one $175 battery coolant change.

EV's required far less maintenance than a gas car - this is proven
The maintenance they do required is a lower margin business
The frequency of maintenance is far less
There are fewer parts that wear out lowering the parts business opportunities for both the manufacturer and the parts industry
The life cycle of most EV's and the parts that do wear out is much longer than the average car is on the road

I don't see any threat to Porsche dealer in a 10 year window - but _IF_ EV's become popular enough there will be consolidation and some dealership may end up closing - I expect ICE vehicles and their associated maintain requirements and revenue opportunities to be with us for at least the next $75 years…so I don't see the dealer network going away but perhaps smaller and more focused could be a reality if EV's become a significant percentage of the driving population.

UPS is aggressively pursuing an EV truck fleet partly justified by 80% less maintain cost over the life of one of their delivery trucks…we'll see if that pans out - I personally believe it and expect it to be mostly true - and this is a company driven purely by per-mile cost to deploy a vehicle over the life of the vehicle…so the potential is there.

EV's will disrupt the dealership/service model - no question - it's one of the reasons EV's have been slow to take off - the after sale revenue potential is vastly lower for an EV sale vs. a ICE sale.

I'm reminded of a quote from Robocop

ICE's are a guaranteed parts/service revenue stream post sale - EV's are less so.

daveo4porsche

here is an inspection form from some warranty work (battery software update recall since Chevy doesn't know over the air software update technology exists) - it's a pretty good map of things that don't matter on an EV…

I'll only list the items that apply:

Inspect Lighting
air/heat
wipers
windshield
horn
brake fluid
washer fluid
12 volt battery inspection
cabin HEPA filter
tires
steering/sway bar
wheel bearings
axels
suspension

hacker-pschorr

Sales departments like to boast about how they are the bread and butter of any company. Reality is, the maintenance side is such a cash cow, manufactures are constantly trying to cut out the independent repair shops.
I suppose it's splitting hairs since you said "most of the profits" which could technically mean 51% and still be a true statement. The other 49% is still has a major impact on their bottom line.

The maintenance side of business is also a key area to generate car sales. Anything which brings you back to the dealership is the potential for a new sale. A friend of mine who used to be a service advisor for various European makes, bragged about how many times a simple routine oil change turned into the customer leaving in a different vehicle.

wizee

ChicagoWhale

Archimedes

Sonnen Porsche

Sales department makes over double the service department..... here at least.....