VW has dreams of moving 150,000 Porsches per year by 2012. Meanwhile, Stuttgart’s finest is struggling with a nightmare market. Porsche spokesman Tony Fouladapour told TTAC that the automaker’s franchised dealers are now holding more than a 100 days’ worth of 911s, Caymans and Boxsters. (That’s up from the 92-day supply reported by Automotive News for August 1.) Not to mention the 100 to 150 box-fresh units already heading stateside. Responding to the glut, Porsche’s pulled 2010 inventories from all their dealers’ websites; some 273 Porkers have disappeared into the ether. Or is that from the ether? Either way, Porsche’s hit delete on all but a few ’10 special editions (e.g., the GT3 and Cayenne S Transsyberia). When will the 2010s return to cyberspace (or any other marketing venue)? “When the inventory situation improves.” To that end, the brand’s launched “The Porsche Moment”: 1.9 percent financing. [Thanks to The Comedian for the heads-up.]
Maybe they can start giving buyers more value? Like reducing the MSRP.
Porsche. There are substitutes.
In addition, I haven’t seen Porsche doing any real innovation towards the electric cars.
There is Tesla now, and Toyota/Honda won’t have too much of a problem producing an electric supercar 10~20 years down the road. Even AM is trying to re-badge one.
Porsche on the other hand is trying move down to compete with Corolla …
I’m surprised that much inventory. As I understand it, since the Porsche options list is so long and expensive, most buyers prefer to order their cars speced out from the factory, rather than buying some model off the lot.
1.9 percent financing
If you have to finance a Porsche, you shouldn’t really be buying a Porsche.
jmo :
August 25th, 2009 at 6:12 pm
I’m surprised that much inventory. As I understand it, since the Porsche options list is so long and expensive, most buyers prefer to order their cars speced out from the factory, rather than buying some model off the lot.
I’ve always wondered if they count on people who just gottahaveitrightnow, and who then end up with $1000 seat belts in body colour, $4000 sport exhaust system, and $5000 rims.
I’m with wsn…Porsche pricing is ludicrous, delightful as the cars are.
I used to think that Toyota was becoming the new GM but they seem to have pulled way back from that danger with their major executive shakeup recently. Now VW seems to have the Jones for being the biggest automaker with the most brands. This goal of 150,000+ Porsche sales per year is simply madness.* How long until they offer 0% financing for 72/80 months?
* I’m beginning to think that the Cayman (yes, the Cayman) will someday come to be regarded as the last great Porsche.
If you have to finance a Porsche, you shouldn’t really be buying a Porsche.
You get a Porsche by making your money work as hard as you do. Municipal bonds are paying 5% tax free – would would you sell them to avoid paying 1.9% interest on your Porsche?
Thanks jmo, beat me to it.
BTW, I made two inquiries to Porsche and was receiving daily phone calls until I told them to stop. They’re desperados here in Australia. No movement on price however.
They have 911 Turbo’s IN STOCK (previously custom order only) before the new model comes out!
Someone has screwed up, badly, as is in “GM proportions”.
Pete,
On an $80k Porsche 1.9% vs. 5% munis represents a savings of between $6,500 and $10,000. If they offered rebates or reduced prices all customers would take advantage of the offer. I’m willing to bet that Porsche customers are often buying a car to celebrate a personal or professional milestone and just want to “buy” it regardless of whether financing would make more sense.
Even today, you’re going to get some kid working for Phibro who just got a seven figure bonus and it’s burning a hole is his pocket. Or you have some orthodontist who just made his daughters last tuition payment and feels it’s time for daddy to reward himself. They aren’t going to care about saving money – they just want to write the check and be done with it.
Much better for Porsche to score some additional savvy buyers who appreciate the 1.9% angle than via some brand defiling rebates.
As recently as several weeks ago, the Porsche dealer in Norwood, MA (on the AutoMile) had two 2008 Boxsters on the lot (one inside, one out) with less than 18 miles on each of them. Both were, sad to report, adorned with $10k off stickers…And they were serious. After talking with one of the salesmen (I think only two were there, in fact), he let it be known that the deal wouldn’t stop there, and that other concessions were available if I were ready to “sign and drive”…
Damn, and the C4C program ended yesterday.
Twotone
C4C = Carrera 4 Cabriolet?
;-)
there is a 2010 porsche GT3 listed at the portland porsche dealer.
http://www.sunsetimports.com/cardetail.php?cid=62
Goodbye Karmann Ghia, I mean Boxster
As I recall, Porsche almost bought the farm the last time we had a recession of this magnitude (late ’80s, early ’90s). The mortgage brokers, stockbrokers, realtors and other assorted financial hucksters that bought these are now waiting tables at TGI Fridays.
Any word on how the other boutique makers (Ferrari, Aston, etc) are faring? I’d lay odds on Ferrari being the only one doing even moderately well these days.
CyCarConsulting :
August 26th, 2009 at 12:09 am
Goodbye Karmann Ghia, I mean Boxster
The Karmann Ghia was mid engined? Not to the best of my knowledge…
Porsche began losing control when it launched the car named after a spice, and flew off the road when the Panamera was revealed to the world.
There is such a thing as Karma.
“A committee, is by its nature timid …” said F. Porsche.
When you spend your time on financial ops, because you’d rather be in banking, you’re really committing GM’s mistake in another arena.
Respect the brand, or die — a lot of car exec’s should tattoo that on their foreheads, ambulance-style, to get the reminder each morning as they shave.
How silly.
From a dealer’s standpoint, when there are fewer real buyers out there, if an online shopper is looking for a 2010 model with certain options, isn’t it better to let them know you have one in stock rather than have them assume you don’t because it isn’t listed on your site?
Besides, that inventory will still show up on AutoTrader.com, cars.com, vehix.com, etc., and the dealers’ non-factory-provided websites, won’t it?
Having to finance a Porsche is different than choosing to finance a Porsche.
I bet you that the majority of this 100-day inventory is the Cayenne. That seems to be the one Porsche vehicle that folks would without going through the special order process.
As of yesterday when I ran the numbers, Autotrader showed over 2,000 new model year 2009 911s on dealers’ lots around the U.S.. (124 turbos, 1948 all other 911s)
There are still over 150 new 2008 911’s (17 turbos, 136 all other 911s) on Autotrader.
This does not include MY2008 cars that have been reported as sold, had their warranties punched, and are on the lots as “used” cars now. Autotrader lists sixty such “used” ’08 911s for sale in the U.S. with under 500 miles on the clock.
That totals up to over 2,200 “new” ’08 and ’09 911s on dealers’ lots.
Porsche sold just 651 new 911s last month if you total up all the various configurations.
2285 cars / (651 cars / 31 days in July) = 108 day supply of 911s, NOT including the MY2010 cars that are hiding from the web.
(NOTE: Not every dealer lists on Autotrader, so the actual situation is likely worse than presented above.)
From a dealer’s standpoint, when there are fewer real buyers out there, if an online shopper is looking for a 2010 model with certain options, isn’t it better to let them know you have one in stock rather than have them assume you don’t because it isn’t listed on your site?
I’ve never understood the dealers that refuse to list the options actually on vehicles in their online inventory. What, they really expect that I’m just going to ask them about every car in the right price range, find out that they don’t have the right mix of options, and let them upsell me?
I don’t have time for that sort of run-around when I’m browsing online. When shopping online, I’m often looking at dealers that aren’t my closest one to see if they have an exact match to what I want. I can go get something that isn’t quite perfect (or custom order) at my local dealer at any point. Not listing the options online is just guaranteeing that you don’t get business from the online shopper willing to go 100-500 miles to get exactly what he wants. (At best, you end up splitting the profits with his local dealer, getting the short end.)
Hey Porsche,
If you don’t make any calls, you don’t make any sales. Removing inventory from viewing is the equivalent to not picking up the phone.
jmo :
August 25th, 2009 at 9:16 pm
You get a Porsche by making your money work as hard as you do. Municipal bonds are paying 5% tax free – would would you sell them to avoid paying 1.9% interest on your Porsche?
———————————————
May I ask which municipal bonds is that. Currently, the best savings interest I can get from anywhere is about 2.8% from ING Direct Canada. And that will shrink to like 1.8% after I pay my tax.
My mortgage rate is at 1.75% and HLOC at 3.25%. If I can obtain 5% tax free deposit, I can make some spending money.
wsn,
These are bonds in the US. Many of them pay 5% interest, but the minimum investment is $5K, and the interest rate depends (I think) on the maturity date. The interest income is not subject to federal tax or state tax if you’re a resident of the state.
Cayman/Boxster inventory.
NEW 2008 + 2009 = 1334 vehicles on Autotrader
“Used” 2008 + 2009 = 75 vehicles with under 500 miles on Autotrader
July sales = 352
Inventory days on hand = (1334 + 75 ) / (352 / 31) = 124
124 best case days on hand of Boxsters and Caymans, not including “o”-tens. (Again, not all dealers list on Autotrader.)
May I ask which municipal bonds is that. Currently, the best savings interest I can get from anywhere is about 2.8% from ING Direct Canada. And that will shrink to like 1.8% after I pay my tax.
Thats because it’s a a “savings account” (unless you mean money market account). Municipal bonds are “Bonds”, one is FDIC insured (or equivilent) and unless you are referring to CD’s the money can be withdrawn without penalty at any time. Where as municipal bonds are usually paid back after 20 years, that is why there is a difference b/t interest rates.
There’s a Vanguard muni fund paying ~5% — VWHAX. FTABX, from fidelity, is more conservative but is around 4.3%. Several closed end muni funds yield over 6%, but carry some extra risk because they’re leveraged — for example MEN (although there are many, many others).
Off-topic: A 1.75% mortgage rate? You must be one of those friends of the former head of Countrywide like Senator Dodd. Just kidding.
Where does one get a 1.75% mortgage?
And speaking of Porsche, generally recessions haven’t impacted them as greatly as mass market automakers b/c usually recessions don’t impact the wealthy (porsche customers) adversly. This one is different, the wealthy have been hammered. No $1 million bonus = no new 911 turbo.
Autotrader shows 1249 Cayennes from ’08 through ’10, new or used, with under 500 miles.
July sales were 541 units.
71 days of Cayenne inventory in the system.
______________
Putting all three of my above categories together (All Units / All July Sales) gives an average of 99 days.
Add in the vaporized units and that jumps to about 104 days.
If I could just get past my IMF (Insecurity over Motor Failures), I’d be looking to lowball an ’08.
I just have one question…
Cayenne S Transsyberia
Seriously?
People “drive” own , want to own, want to try and “drive” these things?!
I’m waiting for cash on the hood ala practically every other car manufacturer in the world. :-)
My mortgage rate is at 1.75% and HLOC at 3.25%. If I can obtain 5% tax free deposit, I can make some spending money.
It would only be tax free to an American – you’d owe Canadian income taxes. Also, if you borrowed CAD100,000 in Canada @ 3.25% and bought US munis @ 5% and the dollar moved 20% it could take years to get even again. On the other hand if the USD moved 20% in the other direction your profit on the trade would be enhanced considerably.
However, it is, as you can imagine, very risky.
http://investopedia.com/terms/c/currencycarrytrade.asp
Lumbergh21: There actually was money on 997s last month. Oddly, only on the 2009s. Led to some interesting pricing disparities between ’08s and ’09s.
http://www.6speedonline.com/forums/997/179120-about-pull-trigger-leftover-08-good-deal-5.html#73
Porsche seems like one of those stubborn companies which don’t budge no matter how much we cry. They are proud of their past but as we know, the present is more brutal than past so they will learn slowly…
Just bought an ’08 911 C2 w/ 105 miles & 6-month reduced warranty; price was $17,000 off list, and they did 10% better than KBB estimate on the ’00 trade-in. Looked at three dealers – all were hungry. PS: The financing – used the 1.9% financing, and why not when getting 3.2% on 36-month CDs? It’s just another form of rebates.
@redporsche: Heck, a dealer near me is advertising $17,000 off a leftover C2 Cab with 79 miles, and they’re throwing in the CPO!
FWIW, it does have an odd options list.