By on March 20, 2017

Macan Porsche

While still exclusive, Porsche is gradually becoming a more populous and profitable brand. It delivered 238,000 vehicles last year and posted an operating profit of $4.1 billion — a 14-percent increase over 2015’s accounting.

A little back-of-the-envelope math places the per-car profit at roughly $17,250. As a premium automaker, you’d expect it to rake it in on every vehicle sold. However, Porsche doesn’t limit production to the same extent that Ferrari does in order to maintain artificially high prices. And it absolutely decimates other premium brands that offer exclusivity at a higher volume. BMW and Mercedes-Benz both hover at around $5,000 in profit per car.

Porsche seems to have struck an ideal balance. While its per-car profit was actually higher a few years ago — $23,000 in 2013 — it wasn’t making quite as much money overall. At the time, Bentley pulled in roughly 21 grand per unit and sold fewer vehicles overall. Since then, Porsche has shifted some of its focus downmarket, introduced the Macan, expanded its volume, increased income, and still managed to maintain a sweet profit margin on every vehicle sold.

How did it manage that? Basically, the same way Ford wrangles its F-150.

Ford typically brings in $10-14K on every truck it sells — much more than its average passenger vehicle. Like F-Series buyers, Porsche owners are extremely loyal to the brand and are more than happy to spend more to option out their chosen model. Both companies can sell at volume, keep prices up, and maintain a cult-like following because people love what they are buying. Special edition F-Series are marked up thousands of dollars for what is basically some additional badging, chrome details, and higher quality leather.

The same goes for Porsche’s most affordable model, the Macan. According to Bloomberg, the majority of shoppers don’t settle anywhere near its base $47,500 trim. The base crossover comes in either black or white and the second you even consider silver or blue, it’s another $700. Want red? That’s $3,120, and custom colors will more than double that fee.

That’s just the tip of the spear. You could easily tack on ten grand by simply fiddling with the seats and wheels, regardless of the model or trim you’re interested in. Porsche’s optional extras are endless, desirable, and none of them are cheap. Extras on the more expensive models come at an even higher premium. Similar options on a Panamera or Cayenne will run roughly 10 percent more than they would on a Macan, and it just goes up from there.

It’s unsettlingly rewarding to waste an hour on the company’s website, choosing a vehicle and then morphing it into something that expresses your own distinct sensibilities. By the time you’ve decided that you want a metallic black Macan Turbo with RS rims, a beige interior, and the panoramic sunroof, you’ll be staring $82,690 in the face — and the worst part is, you’ll still want the car.

[Image: Porsche]

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53 Comments on “Porsche Rakes in $17,250 on Every Car It Sells...”


  • avatar
    Asdf

    There’s a sucker born every minute.

    • 0 avatar
      RHD

      And every 2.2 minutes, one of them buys a Porsche.
      The rest of them are busy buying condo timeshares and stock in IHeartMedia.

    • 0 avatar
      raph

      If the choice is left up to me which sandpaper I get to ride this isn’t a bad way to get conned.

      Porsche just happens to be in an enviable position where people find value in the brand even when it’s a CUV/SUV.

      Had I the money I’d go in for a Cayman, 911 or Panamera Wagon depending on my finances ( thought about a Cayman before getting my 15′ GT since the local porsche dealer was being a little generous with last year’s Cayman.

      Maybe after the GT350 is paid off and if I meet my retirement goals I’ll go get ripped off.

    • 0 avatar
      dal20402

      So Asdf, adding together all of your posts lately, I assume the only car of which you approve is a base 2.5 Fusion (with conventional automatic) in a no-cost color?

      No unconventional technology. No extra options to “sucker” people. Built in Mexico, but the manufacturer is under American ownership so it’s an American car. No connection to electric drive whatsoever.

    • 0 avatar
      energetik9

      Throwing out the concept of a car maker making some level of profit on every car they manufacture, I will gladly take my 911 again in a heartbeat.

      I’m guessing you do not own one.

  • avatar
    mike978

    Some of that profit comes from merchandise, so the per vehicle figure is a little inflated. Although it is still the case they are extremely profitable. I wonder if per 911 profit is much higher than the Macan when the Macan us cheaper but uses more Audi/VW technology.

    • 0 avatar
      Matt Posky

      That’s a good point. While it’s minuscule compared to Ferrari, Porsche’s merch sales are definitely above a Honda or Ford. I’d place it just above Mercedes, mainly because Benz doesn’t have a store devoted to branded clothing at my airport.

      Worth noting that Audi posts roughly the same per car profit as BMW and Benz but VW Group typically lumps Lamborghini in with it.

  • avatar
    jmo

    “Ford typically brings in $10-14K on every truck it sells”

    Given the average transaction price the profit margins on an F-150 must be much larger than on the average Porsche. Per asdf’s jelly comment, what kind of sucker does that make the average pickup
    buyer?

    • 0 avatar
      DenverMike

      F-series profits are weak compared to the 911, or Porsche cars in general. But F-series makes it up in sales volume, as the most profitable vehicles, over all. Around $12K per truck is right.

      • 0 avatar
        jmo

        The numbers quoted above disagree. Ford is making 10-14k on a vehicle with an average transaction price of $44k. Porsche is making 17k with an average transaction price almost twice as high. The margins on an F150 are double that of the average Porsche.

        • 0 avatar
          DenverMike

          Yeah, so what F-series sell for half as much… They WEIGHT damn near 2X as much!!!

          But seriously, at “end of day”, or when the dust settles, it’s profit *per unit* that matters here. What it took to get there (OEM and consumer [dealer] outlay of cash) is irrelevant.

          • 0 avatar
            brawnychicken333

            I don’t think that’s really true DenverMike. Margin and profit per unit both matter. Porsche is spending $63 to earn 17. Ford is spending 35 to make 10 (simplifying). Which business would you prefer?

          • 0 avatar
            DenverMike

            There’s more capital “tied up”, it’s true, which they get all back, once the units head off dealers. So what you’re really talking about is “interest” lost/paid if any, to a 2nd party, if cash had to be borrowed.

            But you’re also talking much higher “MSRP”, which may have little to do with actual costs of building the vehicles. It could easily cost more to build a $50,000 F-150 than a $90,000 Porsche.

            Except this has nothing to do with “operating profits”. Just only what’s earned per unit. Not income taxes owed, cash earned from marketing rights of toys and apparel, etc., along with other incidentals, as those can vary greatly and have little to do with the vehicle build/sale itself.

          • 0 avatar
            DenverMike

            To answer the question, I’d prefer the “business” with the most profits per unit (Porsche, 911 specifically), if both businesses sold the near same number of units. Except the don’t (especially if the F-series was it’s own business/brand). So since it also comes down to “volume sales”, the F-series clearly wins out.

          • 0 avatar
            brawnychicken333

            Porsche makes 17K per unit at much higher transaction prices. That tells us that their production costs are much higher-we know that-or their margin per unit would be even better. They spend $63,000 to earn $17,000 (assuming an 80K ATP). Ford spends $34,000 to earn $10000. Porsche gets a 26.9% gross margin, Ford gets 29.4% gross margin. AND they sell more units. Both businesses are good. But Ford’s F-150 business is better.

            Interest, taxes, and the rest are a different situation and unrelated to unit profits.

          • 0 avatar
            DenverMike

            True, Porsche ties up lots more cash (for a few days or hours) until the unit is sold to a dealer, but then “pockets” $7K more than Ford for $29K extra “outlay”, per unit.

            Multiply that by unit, per year…

            Of course Ford makes lots more off the F-series line, but also has to hustle up many times more sales to get their expenses down to where they are.

            Bottom line, the 911 comes within striking distance of F-series total yearly (obscene) profits, with exponentially less sales (units).

        • 0 avatar
          jimh1

          Ford sold 6,651,000 vehicles in 2016 to make a net profit of 4.6 billion dollars…That is $692.00 per vehicle sold in 2016…I’m pretty sure Porsche ate their lunch…

  • avatar
    jkross22

    “By the time you’ve decided that you want a metallic black Macan Turbo with RS rims, a beige interior, and the panoramic sunroof, you’ll be staring $82,690 in the face — and the worst part is, you’ll still want the car.”

    Most of us don’t. They’re awesome, but not worth the asking price. A friend recently leased a base Macan. I asked if she would buy it at lease end, and she confidently said no.

    Porsche… the new ultimate lease machine?

    • 0 avatar
      Matt Posky

      Premium German cars a leased far more frequently than their cheaper domestic rivals. However, even an optioned out lease will leave you shelling out more dough than you might have intended.

      I’m on board with you for the value for money. That bottom line will automatically limit Porsche sales to people with above average finances, making their need to ride the line between premium exclusivity even more important as that sales volume increases (assuming it does).

      • 0 avatar
        philipwitak

        about nine or ten years ago, the porsche magazine ‘christophorus’ issue i was perusing stated that the typical/average/median [sorry – cannot recall which specific term was used] porsche buyer earned around $400,000/year, according to their internal data.

        • 0 avatar
          MLS

          But that was back when toys like the Boxster/Cayman and 911 made up the bulk of Porsche’s sales. Now that the volume leaders are VW-derived CUVs that can reasonably serve as the buyer’s primary vehicle, I’m willing to wager that typical/average/median income has dropped quite a bit. It’s one thing to afford an expensive CUV as the daily driver/family hauler, and quite another to afford an expensive sports car as a second or third vehicle.

  • avatar
    FormerFF

    You spent an hour fooling around with the Porsche car configurator, and came up with a compact crossover? What is this world coming to…

    • 0 avatar
      dal20402

      If you want a compact crossover and care more about driving than packaging, the Macan is the best one on the market. I don’t blame anyone for drooling over one on a configurator.

    • 0 avatar
      S2k Chris

      If I could only have one car and I had a (nearly) unlimited budget, a Macan Turbo or GTS is probably one of the best picks out there, assuming I had to occasionally carry people or stuff (IOW couldn’t go with a 911). You could do a heck of a lot worse.

  • avatar
    TonyJZX

    While Porsche is a top 5 global brand I question what the resale is like sans 911 and maybe select cayman boxster models.

    Macan is too young but my mechanic moonlights as a consignment car salesman and does get a few Cayennes but I dont think a cheap decade old Cayenne is a good buy. Now contrast that with a decade old 911…

  • avatar
    thornmark

    No one needs a Porsche, but is there an affordable new truck for people who live in Bugtussle, OK anymore?

    Seems big debt has destroyed the truck market like it did the housing market and college tuition market. People are hooked into things they really cannot afford. And then become debt slaves.

    Where are the normal trucks used for actual work? I’m old enough to remember that pickups were what poorer folk bought because they couldn’t afford regular passenger cars. Of course those cheapos were largely 4 cylinder imports but the US trucks were affordable too and could easily be gotten stripped.

    Buy used? But they still have all the crap on them that breaks or falls off. Sometimes simple things are the real luxury.

  • avatar
    87 Morgan

    In my opinion, the Macan will be the downfall of Porsche. As soon as you remove the exclusivity from the brand profits will fall. Why would you pay 82k for your optioned out Macan knowing that it has 23k in profit packed in? Once the inventory stacks up, the lease deals will follow and erode the equity of the existing owners.

    • 0 avatar
      sportyaccordy

      No, exclusivity is what almost drove Porsche out of business in the late 90s. 911Rs are still trading hands at SF real estate prices in conjunction with the existence of the Macan. Contrast that with Porsche in the early 90s for example. They almost went the way of Lotus.

      And VWAG in general seems pretty adept at managing inventory. Even in their publicly stated mission to be the #1 car company (if I remember correctly), they somehow avoided the inventory mistakes of BMW & GM.

      • 0 avatar
        bumpy ii

        Aside from the excess inventory of new and used TDIs…

        VW avoided high inventory levels in the US by not having enough sales to justify a high inventory to begin with.

        • 0 avatar
          TonyJZX

          We’ve heard this kind of talk before…

          The “xxxx* will be the downfall of Porsche.

          Where “xxxx” = Boxster or Cayenne or Panamera.

          And yet articles of the above keep happening.

          • 0 avatar
            philipwitak

            correction: the boxster is actually credited with saving porsche, not tagged with any sort of downfall. the 986 provided porsche with a much-needed new model offering, and did so at a significantly discounted price – $39980 – compared to the 911.

            i remember these times very well. my ’97 boxster was the first new porsche i ever purchased.

    • 0 avatar
      stuki

      That even its lowest price vehicle is priced high enough for plebians to ask “why would you?” is exactly the reason P retains its exclusivity. Rolex vs. Casio leaves infinitely more room for whys than Macan/CX-5, yet Rolex seems to retain some exclusivity just fine. Heck, without a CX-5 with a proper transmission available any longer, I’d almost be more apt to ask “why?” the other way.

  • avatar
    7402

    The problem with paying a huge premium for any optioned up vehicle is that the bones are the same as the base vehicle. I do consider a more powerful engine, suspension upgrades, LSD, and the like as sort of worth it if they let you configure the vehicle to meet your needs/desires. Still, the bones are the same.

    I have played with the Porsche configuration tool and always seem to end up with a base 911 with *maybe* the paint to sample option–yeah, it’s expensive but it makes the car truly mine.

  • avatar
    Chan

    I’d much rather be in a base 911 than a loaded Macan, but because the 911 rides on a unique platform the profit to Porsche is less.

    Aside from platform-sharing with VW/Audi, options on the Cayenne and Macan are the profit items. At the price you pay for deviated seat belts, they could have given you an extra set of seat belts. Automated production and computer-controlled inventory/kitting has made it cost practically nothing to change up the colour of some interior bits.

  • avatar
    brn

    How much should the maker of an exclusive brand of automobiles make on each sold?

  • avatar

    I had a Macan for a loaner while we had my biz partner’s 911 cabrio in to fix a broken PORSCHE ACTIVE DYNAMIC MOUNT (TM) and, man, depressing for $47,500 – no NAV, no electrochromic rearview, that goofy graphic inlay on the side like its a Beretta GTU.

  • avatar
    VTECV6NYC

    That’s insane profit. I’ll likely never be in the market for any of these, but I am curious: given Porsche’s notoriously long options list, just how optioned up are the models they usually have on hand at dealerships? Are custom builds more common?

    • 0 avatar
      philipwitak

      porsche dealers in southern california tend to order their lot cars loaded. last time i looked, most boxster and cayman models had about $20-30k of extras added on the sticker, giving most of them a total cost of $75-80k, or more.

    • 0 avatar
      philipwitak

      porsche dealers in southern california tend to order their inventory ‘loaded.’ last time i looked, most boxster and cayman models had about $20-30k of options added to the sticker, giving them a total cost of $75-80k, or more. and i know that i’ve seen more six-figure 981/718 cars than i can even recall.

  • avatar
    akatsuki

    I have never really understood how they have continuously maintained their sports car dominance.

    Is it really that hard to make a practical sports car for someone, like, say Toyota? Instead they produce limited trunk space cars like the MR-S.

  • avatar
    dal20402

    Lots of people at the top of the income and wealth spectrums have lots of money. They use it to distinguish themselves from the people further down. A Porsche with leather air vents and $8k carbon brakes is an awfully good way to do that.

    • 0 avatar
      S2k Chris

      Funny you say that, I think of it the other way around. In most places with a lot of money, a Porsche is not particularly flashy, so you can buy one and still be relatively low key about it, and (almost) no one knows if you have a $99k base one or a $200k loaded up one. I think that has some appeal.

  • avatar
    Big Al from Oz

    Porsche does not “wangle” its profits in a similar fashion as Ford’s F-150.

    This statement is inane and not well thought out.

    What gives the F-150 its greatest advantage is the restriction placed on competitive vehicles. Imports to be precise. Without these constraints on imported pickups you would see a decline in Ford’s F-150 profits.

    Porsche operates in an freer market with no limits placed on competitors.

    • 0 avatar
      S2k Chris

      Yeah, no. First off, there is PLENTY of competition from Chevy/GMC and Dodge for the F-150. Second, they build Toyota Tundras and Nissan Titans here, and most people don’t want them.

      • 0 avatar
        Big Al from Oz

        S2k,
        There is not enough competition. Plus the competition have inflated sales/pricing.

        If Porsche was an American made product with the same levels of protection offered as pickups, would this article been relevant?

        The same goes for pickups.

        • 0 avatar
          DenverMike

          @BAFO – OK, name a “blocked” global pickup that would *dent* F-150, F-250, F-350, F-450 sales, or bring down their prices.

          I’ll wait here……………………………………

          • 0 avatar
            DenverMike

            Too *chicken* to answer? Scamper off into the bush?? Again???

            How the internet signal there? Ever been kicked by a ‘Roo??


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