Porsche rakes in $28,000 per car. Allegedly
Newswheel staff :: 24 January 2007 :: Filed under Porsche, Porsche 911, Porsche Boxster, Porsche Cayman, Europe & UK, US
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Cheap at twice the price?
That Porsche is the world’s most profitable car company is not news. But can the German sports car outfit really be banking $28,000 (£14,000) with every car sold? That’s what the analysts at B&D Forecast reckon…
To put that into context, it’s thought that BMW, itself an extremely profitable company, generates around $3,000 per car while VW scrapes by on approximately $500 per box. Oh, and GM actually bleeds cash to the tune of $2,000 per unit.
Whether B&D Forecast’s numbers, as reported by German rag Welt am Sonntag, are accurate or not, a brief glimpse at the current Porsche price list certainly provides clues to the company’s extraordinary profitability. Porsche currently demands £36,220 in the UK for basic 2.7-litre Boxster. Drop-top 911s kick off at £62k. It is, of course, no secret, that both cars are based on the same basic chassis, though obviously with significant rear-end divergence imposed by the different engine installations.
Profitable platforms
Still, most of the really expensive platform engineering is shared by the two cars. So, although the 911 has a larger, more powerful, flat-six, it’s not hard to imagine that if the Boxster is profitable at £36k, the 911 must be a license to print money at over £60,000.
And if you have any doubts about the Boxster vs 911 comparison, when you factor in the Cayman’s price premium over its folding-roof sibling (the Cayman and Boxster now share exactly the same engine line up) it really is case closed. After all, Porsche charges more for the 911 cabriolet, so how on earth can it justify the Cayman’s premium sticker?
Pricey Porkers
Similarly, the further up the range you venture, the poorer the pickings in terms of value. Surely most of the £6,000 premium Porsche charges for the likes of the Boxster S or 911 Carrera S is pure profit?
Unsurprisingly, Porsche has released a statement denying the accuracy of the claim and pointing out that its earnings have been boosted, on paper, by its association with VW as well as revenue streams not directly related to car manufacturing including hedging transactions.
But even if Porsche really is clearing nearly $30,000 on every car it offloads, the real question is not whether Porsche’s profits are too big, but whether its cars offer good value compared to the opposition. For now, it seems most buyers believe just that.
Linkage:
Porsche’s official response
Posted 19 February 2007, by Geoff Richards
It's all about positioning. Would anyone argue that the 911 Turbo is "too expensive" when an F430 is 20-whatever grand more? Chris Harris recently stated that he felt the Caymen would be no less of a car even if it cost £45k
I say props to Porsche. The likes of NIKE have been doing this for years! :)