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    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

     Currency valuation could be part of the answer. Unfortunately, in the Porsche case it does not make sense. Since the value of the car is determined in euro selling the car in US with a cheap dollar only reduces Porsche profit per car. They would be better off selling the car in Europe and receive high profit margins.

    Which leads to a somewhat controversial marketing theory which is maintaining market share to get production cost down. Porsche priced the US North America market assuming a 40-50% share of their total production.If they were unable to sell almost half their cars in NA then their per unit cost would go up dramatically. They need the volume to keep their cost down.

    But if that is true there is no reason why Europeans should pay substantially more. Does anyone know the profit margin on a 911 turbo sold in the US and one sold in Europe? I believe the profit margin on my 430 was $25,000.


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    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

     Take a look at the dollar vs euro chart. The dollar is due to advance in the next year while the euro is set to crash. 


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Luxury car pricing is a exercise in relative perceptions!

     

    You guys in Europe (some countries) and the US pay so much less than us here at the" end of the world"-its laughable!

    Our Goverment would make far more on a P Car than Porche do.

    It makes me laugh when I see price issues amongst buyers arise in the States over the 911 -

    If I lived in the States-I would have my 997.2 Turbo S order in yesterday and then I would put another deposit down for the 991 at the same time.

    But hey-live the highlife guys-the bills are mounting.

    Remember Argentina was once the richest per capita country in the world.

     

     


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    especially in the case of porsche, it has a lot to do with how the company was run. it was more of a financial institution than a car maker.

    with economics of scale and market demographics taken into account porsche was probably making more profit on US sold units than on europe based sales.

    here in egypt we have the advantage of US prices as well.....and a light disadvantage of the 300% import tax for vehicles above 2000 cc.

     


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    Speed has never killed anyone, suddenly becoming stationary... That's what gets you.

    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Here in the UK, the cost of Porsches has not changed to reflect the big devaluation of the GBP against the Euro. Base price of the 997 turbo is £105k including taxes, call it €120k or $165k; so, about the same as the US and much less than in mainland Europe. Presumably, Porsche do this to maintain the market in the UK/US which would otherwise disappear into thin air.

    Go to the big dealership opposite the factory in Stuttgart-Zuffenhausen and the prices - including those of secondhand cars - are eye-watering.

    I have a 997.2 turbo and see the turbo S for what it is: a car with the essential options bundled (I have all of them except, as you can see, PCCB), some "exclusive" leather and a modified ECU. Still an attractive offering nonetheless. That said, not once since I have had the car have I thought, "I could just do with an extra 30 bhp and two-tone leather seats". This car is aimed, as Porsche freely admit, at those who want the top of the range, no matter what.


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    The USA is the most competitive auto market in the world. Competition among suppliers reduces prices.  Some companies can't compete when operating on a truly level playing field (FIAT?).  Years ago, VW could only really succeed where they had a sweet-heart deal from a national government (like Brazil) that worked against their competitors.   One aspect of the drive to reduce costs was the change to wholly-owned import distributors by nearly every non-USA-based car manufacturer.  Max Hoffman was an inefficient wedge between German manufacturers and their customers.

    Other countries have more taxes baked into the system (import, vehicle-specific, etc.) and the retail distribution channels are more ossified with guaranteed markups at many more levels of the chain.  Rent-seeking by indigenous suppliers via import restrictions and tax arrangements is one place to look.  There are also retail distribution cultures (number of levels, minimum mark-ups) that are much more costly than what happens in the USA.

    It's not true that the rest of the world "subsidizes" the USA.  Rather, it's that other cultures and governments take a bigger bite of the vehicle pie than happens here.


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    Mike

    2005 Carrera GT - Signal Yellow + 2008 Tesla Roadster - Thunder Gray +1972 BMW 3.0 CSi - Nachtblau +2009 Bentley Arnage T - Black Saphire


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Not sure I understand why Porsche prices in the U.S. relate to living the high life and mounting bills.  Could you explain better?

    Even assuming that New Zealand applies higher government taxes, I am still envious of your beautiful country and presumably your Porsche driving experience there.  Some pics for our enjoyment? 


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Mike, I can understand your point if the Turbo was manufactured  in the US and Germany. It isn't. All cost whether related to taxes or whatever will have been built into the finally cost of the assembly since the car is built exclusively in Germany. The cost to build the car is the same whether it is headed for US, China or Germany.

    Now if your point is more taxes are added on after assembly and there are higher distribution cost in Europe then that could serve as an explanation. However, I have not seen any evidence of that other than the VAT which is not an issue. Something else is at work here and  I have no idea what.Smiley


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    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Well what are dealer margins in europe vs US?


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    nberry:

    Mike, I can understand your point if the Turbo was manufactured  in the US and Germany. It isn't. All cost whether related to taxes or whatever will have been built into the finally cost of the assembly since the car is built exclusively in Germany. The cost to build the car is the same whether it is headed for US, China or Germany.

    Now if your point is more taxes are added on after assembly and there are higher distribution cost in Europe then that could serve as an explanation. However, I have not seen any evidence of that other than the VAT which is not an issue. Something else is at work here and  I have no idea what.Smiley


    Nick,

    I can say that part of the answer for low Porsche prices in USA is $ situation. Ten years ago $ was very strong and Porsche prices in USA were not that big in comparison with domestic German market. But, after September 11th events and aftermath $ lost most of its value in comparison with €(Euro if you can not see it since you use USA keyboard). So, once good prices for profit and costumers become something else...

    Porsche did not like other EU brands(specially VAG) adjust its prices accordingly to low $ value. Now, you got pretty funny situation that Audi R8 V10 is more expensive then Porsche 997.2 Turbo in USA. On domestic German market R8 V10 is little bit cheaper then 997.2 Turbo.

    IMHO PAG is actually doing a favour to its biggest market(USA) with current price politics. What will happend in the future? Who knows? Some economy analyst claims that €(Euro) value will drop pretty soon. I disagree. Since Obama is struggling at home as well(look at recent elections, what will happend next time?) $ wont recover soon IMO...


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    MarkN:

    Here in the UK, the cost of Porsches has not changed to reflect the big devaluation of the GBP against the Euro. Base price of the 997 turbo is £105k including taxes, call it €120k or $165k; so, about the same as the US and much less than in mainland Europe. Presumably, Porsche do this to maintain the market in the UK/US which would otherwise disappear into thin air.

     Well, up until a couple of years ago the prices of Porsches in the UK were consistently much higher than in Germany. As you say, they only became more favourable in UK recently because the exchange rate of the pound against the Euro has fallen so much, and Porsche has not (yet) compensated by jacking up the UK list prices.  

    So the discrepancy has come about due to a lack of intervention on Porsche's part, rather than because of any proactive aggressive pricing. This is also a major part of the explanation for the US prices being lower than in Germany.

    There was a time back in the 1980s when exchange rate fluctuations went the other way, and Porsches were cheaper in Germany than the USA. I briefly considered trying to help finance my first vacation in the USA by shipping over a 911 I was due to sell anyway, using it to tour part of the country, and then selling it there at a premium. The hassle caused by the different technical specs, which were already diverging then, ruled against it.


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    fritz


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)













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    http://i28.tinypic.com/166k5zo.png


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)










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    http://i28.tinypic.com/166k5zo.png


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

     Fritz, Kelso, those explanation go a long way toward explaining the price discrepancy. Yet, the dollar is weak and the Euro is strong but the dollar buys a Porsche a lot cheaper than the Euro. I do understand that Porsche bought insurance against the declining dollar and that helped stabilize the US price but I believe the "hedge" expire in 2008.

    The discrepancy remains. I suspect Kelso is correct and what I alluded to in an earlier post. Porsche does not want to lose market share in NA and is subsidizing (smaller margins) US Porsche purchases.


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    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    who is kelso ?


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    http://i28.tinypic.com/166k5zo.png


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    The Ice Blue Metallic reminds me of the 1980s Iris Blue   ( not  to be confused with the 1990s purplish Iris Blue ) . 

     I like the black/crema interior .  It's about time they entered the 21st century with their interiors . Their current all red interior option is  circa "Victorian-era brothel ".

    The black/blue  is a waste as it is way too limited with matching ext colors .

    They should have offered a black/silver ( the whitish grey color as in Audis)  as the other choice instead .


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    intouch1:

    especially in the case of porsche, it has a lot to do with how the company was run. it was more of a financial institution than a car maker.

    with economics of scale and market demographics taken into account porsche was probably making more profit on US sold units than on europe based sales.

    here in egypt we have the advantage of US prices as well.....and a light disadvantage of the 300% import tax for vehicles above 2000 cc.

     

    So you'd be looking at over $800K for a 458 for example?


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    MKW:

    The Ice Blue Metallic reminds me of the 1980s Iris Blue   ( not  to be confused with the 1990s purplish Iris Blue ) . 

     I like the black/crema interior .  It's about time they entered the 21st century with their interiors . Their current all red interior option is  circa "Victorian-era brothel ".

    The black/blue  is a waste as it is way too limited with matching ext colors .

    They should have offered a black/silver ( the whitish grey color as in Audis)  as the other choice instead .


    I would have wished for a cocoa/crema version. Smiley
     


    --

    The secret of life is to admire without desiring.


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    nberry:

     Fritz, Kelso, those explanation go a long way toward explaining the price discrepancy. Yet, the dollar is weak and the Euro is strong but the dollar buys a Porsche a lot cheaper than the Euro. I do understand that Porsche bought insurance against the declining dollar and that helped stabilize the US price but I believe the "hedge" expire in 2008.

    The discrepancy remains. I suspect Kelso is correct and what I alluded to in an earlier post. Porsche does not want to lose market share in NA and is subsidizing (smaller margins) US Porsche purchases.

    As an example, if a manufacturer had fixed prices in the USA and in Euroland when the $ and € were at 1-to1, which they were at one time, and then the € went to over $ 1.40, which it has, that manufacturer would have to increase US prices by 40% to maintain margins. 

    To eliminate the carnage this move would cause, manufacturers hedge future sales as you said, and try to maintain stable prices in individual markets regardless of forex rates. This results in discrepancies between different markets. 

    When hedges expire they are generally rolled over, but at new rates which reflect the changes in the meantime. Ferrari has "corrected" its US pricing to reflect this. Porsche would appear to biting the bullet for the present. Get your 911 now while stocks last. Smiley


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    fritz


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    BiTurbo:

    who is kelso ?


    Me.SmileySmiley

    Nick just mistyped my name.Smiley


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

     Euro traded down to 0.83 for one USD. At that time, all you could hear about was people importing exotic cars from europe...


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    SciFrog:

     Euro traded down to 0.83 for one USD. At that time, all you could hear about was people importing exotic cars from europe...

     They have been coming back for a while now. Smiley


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    fritz


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    KresoF1:
    BiTurbo:

    who is kelso ?


    Me.SmileySmiley

    Nick just mistyped my name.Smiley


    May I call you Kelso as well, Kreso? Smiley
     


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    The secret of life is to admire without desiring.


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

     That 0.83 exchange rate was in october 2000.

    It was 1.60 in july 2008 Smiley

    Right now at 1.37 so the base price of the new Turbo S should be about $ 199.500Smiley


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Rossi:
    KresoF1:
    BiTurbo:

    who is kelso ?


    Me.SmileySmiley

    Nick just mistyped my name.Smiley


    May I call you Kelso as well, Kreso? Smiley
     

     Only if your typing skills are as good as Nick's.  Smiley


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    fritz


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    Rossi:
    MKW:

    The Ice Blue Metallic reminds me of the 1980s Iris Blue   ( not  to be confused with the 1990s purplish Iris Blue ) . 

     I like the black/crema interior .  It's about time they entered the 21st century with their interiors . Their current all red interior option is  circa "Victorian-era brothel ".

    The black/blue  is a waste as it is way too limited with matching ext colors .

    They should have offered a black/silver ( the whitish grey color as in Audis)  as the other choice instead .


    I would have wished for a cocoa/crema version. Smiley
     

     You're right : cocoa /crema/cocoa carpet  and black/silver /black carpet would have been perfect !

    That black/blue seems  more appropriate in a " toy car " like a Mini .


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    lowdown:

     That 0.83 exchange rate was in october 2000.

    It was 1.60 in july 2008 Smiley

    Right now at 1.37 so the base price of the new Turbo S should be about $ 199.500Smiley

    Well, the Euro was not introduced as a currency until January 2002, so in October 2000 it was just a "theoretical" entity  -  the average value of the basket of currencies which were replaced by the Euro on 1st January 2002. 

    Since its actual introduction as a tradeable currency, it has appreciated in value pretty consistently, with just two previous periods of downward correction to compensate for "over-exuberance" Smiley in the forex market.

    Hardly the picture of a failure: 

    EurUsdExchange.png


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    fritz


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    KresoF1:
    BiTurbo:

    who is kelso ?


    Me.SmileySmiley

    Nick just mistyped my name.Smiley

     If your real name is Kreso, please accept my apology. Smiley I suspect it isn't so no harm done.Smiley

    Fritz, cutting through your impeccably structured sentences, Porsche is in fact subsidizing Porsche buyers in the US. They cannot raise prices to reflect their target margins for fear of losing market share. It all makes sense now. Thank you.Smiley


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    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

    nberry:
    ................Porsche is in fact subsidizing Porsche buyers in the US. They cannot raise prices to reflect their target margins for fear of losing market share. It all makes sense now. Thank you.Smiley

     It's not only a question of maintaining market share, Nick. 

    If you just look at the exchange-rate graph I coincidentally posted immediately above your post, you will see that no importer could change its pricing in line with those rapid rate-shifts and still maintain credibility in the market. 

    In order to be able to plan your production and control your own destiny, you have to commit yourself in advance. 

    However, you are right of course. If you were to reduce production numbers just because you could not make as much margin as you would like to on part of your production, you would also reduce your profit on the smaller number of units you would then end up making. 
    The margin on each unit isn't everything. In the end analysis, it's the overall profit that counts. 


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    fritz


    Re: New 997 Turbo S and Turbo S Cabriolet (2010)

     If Porsche was to reduce prices in Europe would that generate more sales thereby INCREASING profits as a result of additional volume though at a lower profit level?

     That probably would create a bigger problem because it would REDUCE resale value for present owners. 


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