Originally Posted by konaforever
Porsche does make great cars, but they also have quite large margins. They don't have one of the highest if not the highest profit margins out there without good reason. People are willing to pay these margins, but that doesn't mean it's great value.
Below from WSJ:
"Operating profit margins of around 20% are pretty much unheard of in the auto industry’s recent history. Volume car makers often eke out profit margins around 2%-3%, maybe around 5% or 6% if things are going well. Big luxury-car makers such as Mercedes-Benz and Audi currently reap between 9% and 13% margins (watch out for BMW earnings Tuesday)
Porsche’s margins have roared ahead in recent years, helped by a streamlined production system and strong pricing power. But maintaining profit margins of around 20% will become increasingly difficult, the closer Porsche gets to achieving its target of doubling annual sales to 200,000 cars by 2018."
I am well aware that they make the highest margins in the auto industry and yes you are right. They dont have the highest without good reason. They make what are argueably the best cars in the industry as well so IMO its justified since its a high end product that people WILL pay to have.
Selling 200K cars a year they wont need to make those type of margins, though Id venture to say margins wont drop much (maybe 17% instead of 20%) but they will make up those margin dollars with the increased volume.
I was making the point that what you get in a 991S for the price is a great value. The performance and handling we all know are there. But it's the quality, the fit and finish and superior parts as well as the inherent reliability and dependability they have that are just leaps and bounds above pretty much everyone else that really put it in a class of its own.
I do think there are some moves they need to make though, such as ALWAYS having a top end car or two (CGT, 918 Spyder) that will be priced around 300-400K. This car would be the "true" exotic car in the lineup that not only give you the Ferrari/Lambo beating performance and handling, but also the looks that come with a "true" exotic. We know how truly exotic a car they can make, but they should showcase this with a model that is a staple in the line up rather than a one off thing every decade or so.