Monday, March 20, 2017

Less Is More Profitable

Porsche pockets $17,250 profit on every vehicle

Porsche’s profit machine, already humming, just shifted up.

The Volkswagen AG brand delivered 238,000 vehicles last year and posted an operating profit of 3.9 billion euros ($4.1 billion), up 14 percent from 2015. Put those numbers together and it’s on pace to net about $17,250 a vehicle, up 9 percent.

Its Teutonic peers don’t have nearly as much profit punch. Daimler AG pocketed about $5,000 a vehicle last year, roughly the same margin BMW AG has been managing. Part of the money magic is simply price. Porsche doesn’t make cheap cars. Even luxury players like Mercedes occasionally offer more pedestrian versions at narrower margins to get aspiring buyers into the family. And make no mistake, Porsche customers are paying a premium for the brand’s reputation.

(AutoNews.com)

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