Quote:
Porsche-Jeck said:
As for Porsche's greed (excessive option list, only moderate HP-increase over time) I think we should not blame Porsche in the first place, but Porsche's competitors!
Porsche generated an EBT-margin of nearly 19% in the most recent FY (04/05) - not including the dealership's additional margin of course. As such a high margin is unparalleled in the car industry it is a clear sign of lacking competition. I think most people would recognise a BMW M3 more as a superfast sedan than a sports car, so there is not a too big overlap in the respective audiences.
Traditionally Ferrari and Lamborghini are regarded as P's competitors building sports cars which you can enjoy for everyday use also (that a lot of F-car owners abusing their cars as garage queens, is another topic though), although pricewise there is only a small overlap with Porsche's most expensive models.
The problem is, that Ferrari sticks to an ancient business model which does not allow to create value for the company due to it's self-imposed limitation of production capacity (I think it's max. 4,300 cars p.a.), not allowing for economies of scale. To me it's very sad that Ferrari (which I have a lot of respect and passion for) generates a ridiculous appr. 1.5 bn Euro sales (ridiculous compared to the world-wide awareness and reputation of the brand) with NO PROFIT at all (Porsches EBT nowadays is close to Ferrari's sales). The only people making profits with Ferraris are some dealers and customers (specifically in the US) abusing the closed shop system.
Why does Ferrari not learn from the Porsche experience and would offer some new model range at least in the 100 k Euro market ? They might loose some existing snob customers who are after the exclusivity thing (BTW I don't think that Porsche has lost any 911 customer by introducing the Boxster), but overall I bet they would create big value for their shareholders AND (new) customers.
The same rule should apply to Lamborghini, but I doubt that they would allow to compete with Porsche in a broader range after Porsche has bought the 20% share in VW.
So basically Porsche might feel like having created almost a monopoly in the midrange (pricewise) market for Sportscars with a "everyday use option" (F-cars and L-cars being too expensive for most of P's customers, maybe a little bit too flashy for some others, Lotus & Co. not too expensive, but more track-toys than for everyday use).
So it's natural for Porsche to exploit their USP to the max. until really being challenged by their competitors.
To me it compares to the situation in F1 when everybody has been complaining that Schumi and Ferrari would bore the audience to death with their endless seeming string of victories - in a competitive environment they should have been complaining about the poor performance of the competitors rather than blaming Ferrari/Schumi.
Totally agree. Porsche has the best niche in the sports car market, the one that produces the greatest profits possible on these "supercars." It seems to me that's why they introduced the Cayman S, to prevent a competitor from entering their niche, and if one did, to defend it with a fine product.
Last year, just as the new 997 was being introduced in England, Andrew English of the London Daily Telegraph (26/6/04) agreed with the Porsche CEO, Dr. Wiedeking, in stating that the new 911 offered the most car for the money in Porsche history. I think that assessment was spot-on.
The bottom line is that Porsche is highly profitable precisely because it has given customers what they want, the best sports car in that price range.
I can't wait to take delivery of my 911S, which now should arrive early, by the second week of January.
Jim