Porsche /Patrick Lang Porsche 911: Nobody makes more profit
29.06.2020
M ichael Dean, on the automotive industry a specialized analyst at the business news service Bloomberg, is certain: in 2019 the Porsche 911 (992 series) was the car with the world's highest profit margin. But since automakers are the very last to come up with figures on their margins, it is questionable how he gets that. Here is his justification - in addition, Prof. Stefan Bratzel from the Center of Automotive Management (CAM) in Bergisch Gladbach lets us in on the pitfalls of margin assessment for car model series.
911 makes a significant contribution
Achim Hartmann
Porsche 911 Turbo S: According to the business news service Bloomberg, the surcharges for the Turbo variants of the 911 are net profit for Porsche.
Expensive derivatives are net profit
According to Michael Dean, the profit of the 911 increases disproportionately when it comes to the sale of its derivatives. From the analyst's point of view, the surcharge for the turbo-charged models is pure profit for Porsche - he estimates this turbo profit at half a billion dollars (currently around 445 million euros) per year. Porsche achieves similar net profits with expensive additional equipment such as ceramic brakes.
Porsche is ahead of overall sales with 911 sales
In addition, Dean emphasizes the imHigh sales figures of the 911 compared to direct competing models: while global car sales increased by three percent in 2019, Porsche was able to sell ten percent more of the 911. And in 2018, Porsche sold more 911 vehicles than Aston Martin, Bentley, Ferrari and Lamborghini across all their model series combined.
Correct figures are the manufacturer's secret
Stefan Bratzel emphasizes with regard to profit margins for automobile series: 'Only the manufacturers have the numbers.' As expected, Porsche even rejected requests for a margin ranking of the individual model series. According to Bratzel, the calculation of the margin includes, among other things, the development costs, the time in which the manufacturer picks up these development costs again (currently on average in six to seven years) and which other series he can also divide the development costs into: After all, certain components come in also used there. Difficult for analysts is not only the fact that the manufacturers are absolutely silent about the profit margin per model series, but also that it is unknown what the average total price of the vehicles sold is made up of. There is generally no information about the share of special equipment sold and individually granted discounts.
Porsche
Porsche 911 Turbo S Cabrio: Porsche pays for every extra well - that drives profits up.
The more expensive, the higher the profit
However, according to Bratzel, one basic rule applies: the more expensive the car, the higher it is Profit margin - and the Porsche 911 starts at a smooth 106,352 euros. The CAM professor also reveals what analysts sometimes do to roughly estimate the profit margins per model series: They simply divide the profit by the number of vehicles sold. At Porsche, this results in a profit of around 15,000 euros per vehicle. 'And if Porsche doesn't make any mistakes, and I don't think they make any, then the profit with the 911 is even higher,' says Bratzel with certainty.
The never-ending list of surcharges also helps
A car doesn't become really profitable just by onehigh basic price or expensive options and equipment. Otherwise a Rolls-Royce or something similar would probably be at the top of profitability. However, a large margin can only arise if, on the one hand, enough vehicles are sold and, on the other hand, enough expensive extras are offered that can be easily implemented on the production side. That is not to say that ramshackle parts are sold at high prices. Efficiency, planning and product strategy play a major role here.
Porsche
Shopping at Porsche is cheap Rare. High-priced special equipment drives the margin up.
Decorative stitching: expensive for customers - good for Porsche
An example: Anyone who wants decorative stitching in a color of their choice in their 911 will pay just over 3,000 euros. Whether green or red thread is stretched in the sewing machine does not, however, drive expenditure at Porsche itself into astronomical heights. The fact that common options such as seat heating, decorative strips or LED lights at sports car manufacturers cost a little more on average than with a small car, that is brand image and does not deter customers. The sales figures show: In 2019 Porsche will sell more 911s than Bentley, Aston Martin, Lamborgini, Ferrari and Maserati can sell together with all their models.
In our photo show you will find the latest model variant of the current one Generation 992 - the Turbo S. And it has it all.
