How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?

by Gabe Beita Kiser
57,740 reads

For reference, Mercedes and BMW only average $5,000 of profit per car sold.
It takes but a minute of simple math to find out that Porsche makes a boatload of cash on each car it sells, much higher than some of its more endowed rivals, and if a post by Porsche enthusiast site Flatsixes.com is true, Porsche could have higher profit margins than any other competitor. Using variables supplied by Bloomberg’s latest interview with the German sports car manufacturer, we can see that a record 238,000 Porsche vehicles were delivered last year, the same year it posted profits of €3.9 billion ($4.1 billion).
How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?
Easy division works out to an astonishing $17,225 of profit on each car it sells, rocketing past Mercedes-Benz and BMW’s average of about $5,000 per vehicle. Of course much of this is attributed to the fact that Porsche sells cars that are more expensive than its two German rivals, which rely more on volume and moderate to high prices (versus high to absurdly high prices) to get by. Porsche’s infamous tactics of charging massive premiums for its options and special packages proves to come in handy as well. Even though new models like the Macan have a starting price of $47,50 and are targeted at those who want entry-level picks, the average sale price of a Porsche comes out to $99,000.

That's in part because of options such as natural leather seats, custom paint, and accessories that drive prices higher. And then there are the top tier models such as the $144,000 911 GT3 RS or the new Panamera Turbo S E-Hybrid with its starting price of $196,593 that help nudge up the average. Of course it doesn’t hurt that profit margins for high-priced vehicles are already high, with Ferrari making up to $90,000 in profits per vehicle, however that figure factors in the cash it makes from selling Ferrari-branded clothing and accessories. Unlike Ferrari, Porsche doesn’t seem concerned with suppressing supply in order to drive up price, but it also doesn't want to take Mercedes’ approach of building many varieties of vehicle in order to move volume.

How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?
How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?
Instead, Porsche wants nothing more to leave a smile on the face of its customers. “We’re concentrating on delighted customers,” said Oliver Blume, chairman of the Porsche executive board. So far, that approach seems to be working well for the automaker.

How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?
How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?








by Gabe Beita Kiser
How The Hell Does Porsche Make $17,225 Of Profit On Each Car It Sells?