Go Back   Team-BHP > BHP Worldwide > The International Automotive Scene


Reply
 
Thread Tools Search this Thread
Old 1st June 2017, 10:16   #1
BHPian
 
jalajprakash's Avatar
 
Join Date: Aug 2015
Location: Delhi
Posts: 177
Thanked: 439 Times
Default Porsche to crack down on owners who flip their cars for a profit

Porsche to crack down on owners who flip their cars for a profit-porsche.jpg

Just read this news so sharing it with TeamBHP since there was no existing thread on it.

We all know how insane the valuations for the 911R has gotten in the used car market. The initial few that landed in the second hand market, sold for over a million dollars when the base MSRP was just $182,000. But awesome news from the Porsche GT boss Andreas Preuninger who has said that he will be bringing the hammer down on owners who have been treating the cars as investments instead of actually driving them.

In an interview with the magazine Car and Driver, he said
Quote:
I personally like to see my cars being used. That’s what we build them for. They are just too good to be left to stand and collect dust...I don’t like this business of people buying our cars to make money on them. That was never our intention.

The purpose of limiting a car is not for it to gain value. We don’t want to be laying money on each car’s roof when they run out of the factory.
People who bought the 911R at those ridiculous prices are obviously pissed by the announcement of the 991.2 911 GT3 being available with a manual transmission and slightly better engine but the only condolences Andreas has for such owners is that
Quote:
Porsche is an automaker, not a "hedge fund".
Even though flipping cars isn't inherently illegal, Porsche doesn't like it since it upsets the market for GT cars and keeps the cars out of the hands of people who actually love driving them.


Porsche's plan for disrupting the flipping market is as follows,
Quote:
We are monitoring very closely who is flipping cars,” he said. “We do not build too many cars and we know most of our customers well—we like to have a name for every car before we build it.
Hopefully, this message from Porsche stops people from buying their GT cars as an investment and I wonder if this will have any effect on dealers who introduce a markup on cars moving out from their showrooms.


I personally love this announcement from Porsche as a big fan of the Porsche GT3 and am thankful that Porsche is looking out for the enthusiasts!

Source : http://blog.caranddriver.com/porsche...-and-flippers/

Last edited by jalajprakash : 1st June 2017 at 10:34.
jalajprakash is offline   (29) Thanks Reply With Quote
Old 1st June 2017, 10:36   #2
Team-BHP Support
 
Rudra Sen's Avatar
 
Join Date: Apr 2004
Location: Bangalore
Posts: 10,404
Thanked: 4,088 Times
Default re: Porsche to crack down on owners who flip their cars for a profit

Mod note: Thread moved to International Automotive Scene.
Rudra Sen is offline   Reply With Quote
Old 1st June 2017, 11:07   #3
Senior - BHPian
 
agambhandari's Avatar
 
Join Date: Jun 2012
Location: Delhi,Ludhiana
Posts: 1,163
Thanked: 877 Times
Default re: Porsche to crack down on owners who flip their cars for a profit

A great step from a manufacturer who cares about their cars. A similar problem is faced by Dodge on their limited run challengers like the Demon this time. Though in that case the problem was a little different, the dealers ordering the cars and then selling them for whatever price they could get

They've come up with a solution to it by putting a Plaque of the owner's name in the car!! Not sure how that would affect the resale but it is a nice idea.
agambhandari is online now   (8) Thanks Reply With Quote
Old 1st June 2017, 11:18   #4
Senior - BHPian
 
DieselFan's Avatar
 
Join Date: Mar 2007
Location: Bangalore
Posts: 1,570
Thanked: 233 Times
Default re: Porsche to crack down on owners who flip their cars for a profit

If the car has such a huge demand Porsche should just produce extra cars and increase the supply and make profits on it. I really wonder whether they have any business sense at all.
DieselFan is offline   (13) Thanks Reply With Quote
Old 1st June 2017, 11:20   #5
v12
Distinguished - BHPian
 
v12's Avatar
 
Join Date: Feb 2004
Location: Mumbai
Posts: 5,850
Thanked: 3,195 Times
Default re: Porsche to crack down on owners who flip their cars for a profit

Another option they could try out is that have the warranty available only to the first owner / 2 years. Not sure to what extent this would help.

Or maybe they should follow the same strategy that Ferrari followed when they sold the Enzo to only deserving owners.
v12 is offline   (2) Thanks Reply With Quote
Old 1st June 2017, 12:08   #6
BHPian
 
jalajprakash's Avatar
 
Join Date: Aug 2015
Location: Delhi
Posts: 177
Thanked: 439 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Quote:
Originally Posted by agambhandari View Post
A great step from a manufacturer who cares about their cars. A similar problem is faced by Dodge on their limited run challengers like the Demon this time. Though in that case the problem was a little different, the dealers ordering the cars and then selling them for whatever price they could get

They've come up with a solution to it by putting a Plaque of the owner's name in the car!! Not sure how that would affect the resale but it is a nice idea.
Ford actually faced the dealer markup problem big time with the GT350 and the GT350R. The GT350 has at least come down and can be bought at MSRP but the GT350R is still going with $30,000-$50,000 markup on a car that is $70,000 completely specced out. Ford hasn't done much about it.

Dogde solved the dealer markup on the Hellcat cars when they initially came out by refusing to accept orders from dealers until they sold the existing cars in their lots and also communicated this news to the customers. The dealers not wanting to hold on to marked up cars that people were not buying had to lower the mark up and now the Hellcats can be found at MSRP (in fact really cheap lease deals too!). The Demon as you said is being built to order by each customer since there are very few of them which means there isn't much the dealer can do when each car already has a name attached to it.

Quote:
Originally Posted by DieselFan View Post
If the car has such a huge demand Porsche should just produce extra cars and increase the supply and make profits on it. I really wonder whether they have any business sense at all.
Porsche makes their profits on the Cayenne and the Macan. I doubt they are raking in the cash from the production of the GT line-up. The GT cars are meant as halo cars, meant to represent the pinnacle of the driving experience, so they want those cars to be driven instead of collect dust with zero miles.

Quote:
Originally Posted by v12 View Post
Another option they could try out is that have the warranty available only to the first owner / 2 years. Not sure to what extent this would help.

Or maybe they should follow the same strategy that Ferrari followed when they sold the Enzo to only deserving owners.
I think the warranty is 2 years anyways but not much can go wrong with a modern car that is left in a garage with a trickle charger.

Porsche did choose the owners by first offering the car only to people who had ordered a 918 Spyder but I guess the first few people who flipped the 911R made so much money that they could buy another 918.

Ferrari too has a system in place from what YouTube tells me. To be eligible for a halo car (LaFerrari), you need to own 5 different new Ferraris (California, 458, F12, 430, FF etc) as well as a few older ones. After coming in possession of your new car, you are not allowed to resell it for 2 years or else you will not be eligible for the next halo car.

Ford tried the whole application system to choose their customers (and filter the collectors) for the new Ford GT but that didn't go down too well since they ended up approving celebrities who don't even care about driving cars but declining people who daily drive their old Ford GTs.
jalajprakash is offline   (11) Thanks Reply With Quote
Old 1st June 2017, 13:00   #7
Team-BHP Support
 
Rehaan's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 22,324
Thanked: 22,387 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Quote:
Originally Posted by jalajprakash View Post
But awesome news from the Porsche GT boss Andreas Preuninger who has said that he will be bringing the hammer down on owners who have been treating the cars as investments instead of actually driving them.
Interesting news... but what's his statement on why they don't just make more of them to at least partially fulfill the ridiculous demand?

Quote:
Originally Posted by v12 View Post
Another option they could try out is that have the warranty available only to the first owner / 2 years. Not sure to what extent this would help.
Unfortunately I don't think that will be any kind of dissuasion for someone who is paying >$1 Million for a $182,000 car
Rehaan is offline   (2) Thanks Reply With Quote
Old 1st June 2017, 13:07   #8
BHPian
 
Maky's Avatar
 
Join Date: Feb 2013
Location: Mumbai
Posts: 737
Thanked: 322 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Quote:
Originally Posted by DieselFan View Post
If the car has such a huge demand Porsche should just produce extra cars and increase the supply and make profits on it. I really wonder whether they have any business sense at all.
Porsche has very good business sense.
The limited 911R was nothing but a brand building exercise utilising medium of 'exclusivity' and this one is nothing but a PR manoeuvrer after receiving much flak from the fans.
The company makes their money not on the 911 but rather the Cayenne, Panamera and Macan, in that order.
Maky is offline   (4) Thanks Reply With Quote
Old 1st June 2017, 13:12   #9
BHPian
 
jalajprakash's Avatar
 
Join Date: Aug 2015
Location: Delhi
Posts: 177
Thanked: 439 Times
Default

Quote:
Originally Posted by Rehaan View Post
Interesting news... but what's his statement on why they don't just make more of them to at least partially fulfill the ridiculous demand?

The 911R was meant to be a special treat for 918 owners and that's why it was made in limited numbers. The new manual GT3 won't be as limited and one should be able to get one if one can place an order before they stop production in anticipation of the next one.

I think he was addressing the pissed off people who bought a 911R second hand as an investment thinking it was the last manual NA Porsche and then Porsche announces the manual NA GT3, bringing the value of the 911R close to its original MSRP. "It's a car not an investment" sums it up quite well. Haha
jalajprakash is offline   (8) Thanks Reply With Quote
Old 1st June 2017, 13:37   #10
Senior - BHPian
 
fine69's Avatar
 
Join Date: Dec 2008
Location: New Delhi
Posts: 1,403
Thanked: 845 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

I may be going against the tide here but isn't it ridiculous of Porsche to try to do this in an open consumer market.

However, if you wish to make this a really premium & limited edition experience then just ask your customer base whether they want the best driving car that Porsche can make. After all, they do claim to know their customer well.

Then just make cars for those customers instead of being a cry baby later! If they still sell it off for a huge profit then blacklist them from buying another Porsche ever. This may not make business sense but given the assumption that Porsche think no other car manufacturer can match up their car driving experience they might as well do it.

Of course that blacklisted customer shouldn't be able to get another Porsche in the name of their driver / maid / wife / kid / company / employee either. Just blacklist their legacy!

If I was a Porsche customer and they tried to tell me that I shouldn't be selling my car for a profit of 500-1000% I would simply but a Lambo next time. The kind of customers they are dealing with have enough options and to try to limit their buying/selling of certain brand of cars they might end up losing a few.
fine69 is online now   (10) Thanks Reply With Quote
Old 1st June 2017, 15:27   #11
BHPian
 
akshaymahajan's Avatar
 
Join Date: Oct 2009
Location: Delhi
Posts: 482
Thanked: 113 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Just a casual search brings me this. Ironical
Attached Thumbnails
Porsche to crack down on owners who flip their cars for a profit-capture.png  

akshaymahajan is online now   (4) Thanks Reply With Quote
Old 2nd June 2017, 06:58   #12
Distinguished - BHPian
 
deetjohn's Avatar
 
Join Date: Sep 2006
Location: Kochi
Posts: 4,019
Thanked: 7,285 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Quote:
Originally Posted by fine69 View Post
If I was a Porsche customer and they tried to tell me that I shouldn't be selling my car for a profit of 500-1000% I would simply but a Lambo next time. The kind of customers they are dealing with have enough options and to try to limit their buying/selling of certain brand of cars they might end up losing a few.
The new GT3 is making waves and its available with a Manual transmission as well. And the sticker price is just about $143,000. So, if someone paid over the top for a 911 R, they just lost a big chunk of that money.

Porsche is telling those guys to just enjoy the R as a great driver' car and not as an investment. Kind of Porsche' excuse to defend their stand on the new GT3.

Take a look at this review of the new GT3 (PDK not MT) by Jethro Bovingdon here. His closing words on that video is going to hurt a lot of R owners!
deetjohn is offline   (8) Thanks Reply With Quote
Old 2nd June 2017, 12:15   #13
BHPian
 
Join Date: Jun 2016
Location: Frankfurt
Posts: 31
Thanked: 56 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Quote:
Originally Posted by Rehaan View Post
Interesting news... but what's his statement on why they don't just make more of them to at least partially fulfill the ridiculous demand?

Making more Units of such an exclusive and rare car is the last thing that Porsche would do.

Their Business model is based mainly on two things

1. That they making amazing cars.
2. That they are so exclusive and difficult to get your Hands on. Either in Terms of Price or availability.

If they manufacture more cars citing the great demand, it might get them more Money in the short term.

But it will really mess up the Reputation and Position that they have created for themselves in the market over the years.

To give you an analogy, The golf is arguably the best hatchback ever built! And still sells in great numbers, even though it is sold at premium compared to other cars in the same category. However, no one owns a Golf because it is exclusive and rare, on the contrary, a lot of People avoid Golf and go for some other car which is in all likeliness less reliable, because they want something exclusive.


Porsche is not about making Money, Porsche is about providing their customers with a great machine and at the same time offering a sense of exclusivity.

P.S: Please bear with random capitalisation of some of the words. My operating System is set to german language, hence it automatically capitalizes the first letter of nouns.

Last edited by khan_sultan : 2nd June 2017 at 14:02. Reason: Fixed quote
ishankpatel is offline   (4) Thanks Reply With Quote
Old 2nd June 2017, 21:57   #14
BHPian
 
Join Date: Aug 2014
Location: Delhi-NCR
Posts: 855
Thanked: 4,315 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

Disclaimer: I don't own a Porsche and in this lifetime am not likely to own one ever either.

What the gentleman is peeved about is that he is losing out on the after market profits on his product. This is not the first time the OEM of an uber expensive toy gets lathered up about the after market premium that they (the OEM) feel they should be able to access through higher original tag price. Business jet manufacturers have tried this more than a couple of times and burnt themselves in the bargain. Gulfstream (many of whose customers must be Porsche owners) tried it in recent years and only succeeded in upsetting customers (who are rich, influential and possess fragile egos), losing market share and having to layoff 5000 employees. Mr. Andreas may want to examine these precedents.

Last edited by V.Narayan : 2nd June 2017 at 21:58.
V.Narayan is offline   (4) Thanks Reply With Quote
Old 3rd June 2017, 02:34   #15
BHPian
 
Join Date: Aug 2015
Location: New York City
Posts: 59
Thanked: 83 Times
Default Re: Porsche to crack down on owners who flip their cars for a profit

I have a friend back in Philadelphia who bought a M4 GTS for over USD 140k, just to sell it later next year and make a heck of a profit out of it. The car just sits in his garage with an occasional drive or two every month. These cars are designed to be driven around the track by hardcore enthusiasts. Yet, all they see is garage dust. Flipping cars, especially the limited edition Porsches, BMWs, Challengers, etc. is rather common here in the states. Great move by Porsche to crack down this practice. Kudos!
mohaks19 is offline   (3) Thanks Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
USA: Owners return stripped-down cars to VW dZired The International Automotive Scene 21 19th January 2017 13:26
Diesel Cars: Down, down, down! Market share = 34% S2!!! The Indian Car Scene 66 2nd June 2016 16:21
Karnataka Road Tax, Crack down announced.EDIT: High Court Judgement on Pg 36 attached binoyb22 The Indian Car Scene 1124 10th March 2016 19:00
Why do so many indica owners mistreat their cars? greenhorn The Indian Car Scene 123 10th August 2012 21:38
Should santro owners sell their cars now itself for resale value rahul_intlad The Indian Car Scene 27 5th November 2007 01:26


All times are GMT +5.5. The time now is 11:45.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks