Porsche says “significant price increases” coming middle of this year

[ChronoMax]

https://www.autodaily.com.au/porsche-says-significant-price-increases-are-coming/


Porsche will impose “significant price increases” on its cars in the middle of this year to keep its profits high, its chief financial officer has told investors.

Porsche aims to hit a 20% return “in the long term” as part of its Road-to-20 strategy.

“We will see significant price increases in the middle of the year for the new model year. That will help a lot to make sure we make strong group operating margins,” Meschke said.

Porsche is currently in the middle of a spending push to invest in new EVs that have raised its R&D and capital expenditures to a higher level than it would ideally like. Those expenditures would “peak” in 2023/2024, Meschke said.

 

[xyeahtony]

another reason why cancelling a current order to get a MY24 is silly.

 

[Archimedes]

Been a Porsche customer for a long time, but I think their prices have already gotten out of hand. I can’t imagine ever buying a new Porsche again. Hopefully my Taycan will last at least 8-10 years.

 

[Crazymind]

Understandable move! What’s the point for a business selling a product and get the money 18/20 months later?
Sellling less cars at higher price with a 2/3 months delivery time it’s more profitable.

 

[WasserGKuehlt]

Understandable move! What’s the point for a business selling a product and get the money 18/20 months later?
Sellling less cars at higher price with a 2/3 months delivery time it’s more profitable.

Umm.. another way would be to get one's shit together, deliver cars as quickly as they're built (instead of piling them up in ports), and get paid faster?

But I'd like to point out a logical error there - reducing the time-to-profit doesn't necessarily mean more profit, assuming that the rate of production isn't the gating factor. That is, if you sell every car you can make, building fewer of them can't possibly be more profitable.

I do get your meta point - Porsche posted record sales and profits despite significant delays in completing/delivering a good chunk of cars. Perhaps fixing those problems would be a better way to increase profit (by selling more cars), rather than jacking up the prices because of: inflation/full order books/more "limited" edition models etc.

 

[Crazymind]

or they will increase the price just because thay can

 

[W1NGE]

Great for resale of prior price increased MY cars then.

 

[whitex]

Understandable move! What’s the point for a business selling a product and get the money 18/20 months later?
Sellling less cars at higher price with a 2/3 months delivery time it’s more profitable.

There is always some optimum price+volume point on the supply & demand curve, which yields maximum profits. Porsche seems to be focusing on profit margin percentage rather than total profit though. Perhaps selling all the factories but one, keeping a small group of talented engineers and fabicators, selling a few handfuls of cars per year can satisfy the profit margin target? They will need more power in the Taycan though to compete with the Rimac Nevera, but they only
have to sell a couple of hundred or less, so quad motors are probably on the table. Taycan Turbo S GT, 2400hp, only $3M a piece.

 

[f1eng]

Understandable move! What’s the point for a business selling a product and get the money 18/20 months later?
Sellling less cars at higher price with a 2/3 months delivery time it’s more profitable.

I am no marketing expert but keeping a long wait keeps second hand prices higher and depreciation lower so makes the car more "desirable".
Decades ago Rolls-Royce not only had long delivery but dealers would only accept orders from existing customers.
That lead to a 12 month old car being worth as much as a new one and a customer could basically get a new car free every year and only have the capital tied up.
The strategy had a lot of critics but they kept it up for years but when they decided supplying demand would be a good strategy the second hand value dropped and a huge proportion of previous owners decided the experience was now too expensive and bought an S-class.
Rolls-Royce ended up failing and being sold to BMW.

 

[whitex]

Great for resale of prior price increased MY cars then.

Given the recent thread of too many used Taycans on the market in the UK, perhaps this is your opportunity to retire early? Invest in the undervalued used Taycans before the price increase is announced?

 

[WuffvonTrips]

I think it means that MY24 Taycan might get power enhancements if mainly a software tweak, because an improved MY24 wouldn't risk adversely impacting previous MY's residuals as much if it comes at significantly higher prices.

 

[Sidicks]

But I'd like to point out a logical error there - reducing the time-to-profit doesn't necessarily mean more profit, assuming that the rate of production isn't the gating factor. That is, if you sell every car you can make, building fewer of them can't possibly be more profitable.

It certainly can, if you are making sufficiently more profit per car!

 

[whitex]

I am no marketing expert but keeping a long wait keeps second hand prices higher and depreciation lower so makes the car more "desirable".
Decades ago Rolls-Royce not only had long delivery but dealers would only accept orders from existing customers.
That lead to a 12 month old car being worth as much as a new one and a customer could basically get a new car free every year and only have the capital tied up.
The strategy had a lot of critics but they kept it up for years but when they decided supplying demand would be a good strategy the second hand value dropped and a huge proportion of previous owners decided the experience was now too expensive and bought an S-class.
Rolls-Royce ended up failing and being sold to BMW.

Exclusivity game. It works when you have little to no competition, or if you really are willing to keep your target market small. Porsche would have to raise their prices a lot more to get the latter to work. They could have been another Ferrari, but Porsche decided to go wider market instead, to yield higher net profits. Rimac has a way higher profit margin than Porsche, and makes a car which will leave the Taycan in the dust in pretty much any scenario. Their total profit however is nothing compared to Porsche though.

 

[f1eng]

They could have been another Ferrari, but Porsche decided to go wider market instead,

I am not sure about that.
Ferrari and Porsche entered to road car market from opposite ends, with Porsche basically starting off tuning Volkswagens and moving up market later whereas Ferrari started making tiny numbers of race pedigree road cars at huge prices to fund their racing and "mass producing" much more recently.

Porsche have gone way further up market than I personally ever thought they would already.

 

[andb]

I hope that profits are invested wisely into r&d, battery and software otherwise Tesla and chinese will eat them up 10 years from now.

Ferrari alone is not guaranteed to succeed the EV revolution.