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Old Sat, Mar-15-2014, 09:42:30 AM   #1
EKaru
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Default Volkswagen Pockets an average of $23,000 When You Buy That New Porsche



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One could forgive Volkswagen (VOW:GR) executives for only wanting to drive their fleet of Audis, Bentleys, Porsches, and Lamborghinis. The German giant’s luxury offerings are outperforming its pedestrian passenger cars, both on roads and off.

For every Porsche it sold last year, Volkswagen booked about $23,200 in operating profit, for a margin of 18 percent, according to an annual report it released this morning. Bentley wasn’t far behind Porsche, and the Audi brand, which includes the Lamborghini badge, posted $5,200 in profit per vehicle at a 10 percent margin. That compares with an $850 return, at a 2.9 percent margin, for one of VW’s mass-market machines, such as the Jetta or Passat.

“Porsche is growing in every respect, from profitability to innovative power, right up to its motor portfolio,” Martin Winterkorn, Volkswagen’s chief executive, said on a conference call this morning.

Why might a Porsche be so much more profitable than something more pedestrian? For one thing, its customers are far less price sensitive. Drivers wealthy enough to consider such a plush ride were likely making a mint on U.S. stocks last year, regardless of where they lived. The average Beetle customer, meanwhile, may have been capturing less economic upside.

What’s more, there is less clear competition to a Porsche or a Bentley—fewer models to “cross-shop,” as car folks say—while anyone kicking the tires on a Passat can probably find a dozen similar sedans less than a mile away. Audi isn’t quite so rarefied, but the brand is making headway by simply beating its peers at BMW (BMW:GR) and Mercedes (DAI:GR).

Indeed, Volkswagen’s high-end models carried the company last year, as demand waned for its more affordable cars and it poured research dollars into retooling its big sellers. The company R&D expenses climbed 23 percent last year, sucking up almost 6 percent of revenue. A euro that steadily gained on the dollar and a shaky Continental economy didn’t help results either. The company’s total sales for 2013 ticked up only 2.2 percent, to €197 billion ($275 billion at this morning’s exchange rate), while income slid 58 percent, to €9.1 billion.

Volkswagen, however, is hoping all those research expenses will pay off this year. As it pieces together 100 new and refreshed models, the company said it may sell more than 10 million vehicles this year, vs. 9.73 million in 2013. “It is fair to say that the Volkswagen Group has proven to be in great shape despite the difficult conditions,” Winterkorn told analysts this morning.

The company is determined to top Toyota (TM) as the world’s No. 1 car seller, a feat that will require millions of Golfs and Jettas. Blue-blood offerings such as Porsche and Bentley don’t move enough metal to make much of a dent on that goal, but their financial performance at the moment is far more impressive than any volume bragging rights.
http://www.businessweek.com/articles...gn_id=DN031314

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Old Sat, Mar-15-2014, 11:55:14 AM   #2
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

Audi average profit margin is not that good; should be a few thousand higher.

Porsche using its name to the skim the market is nothing new. Just ask for a $15k price reduction when you look at a 991S.
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Old Sat, Mar-15-2014, 12:10:30 PM   #3
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

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Old Sat, Mar-15-2014, 01:12:54 PM   #4
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

But does that profit counter the loss on every Bugatti sold?

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sorry, carry on. Wish I could help on this one but I know nothing....
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Old Sat, Mar-15-2014, 01:28:03 PM   #5
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

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But does that profit counter the loss on every Bugatti sold?

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Old Sat, Mar-15-2014, 01:32:18 PM   #6
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

ITT: Dom catches some zzzzzzzzzzz's
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Teaching what's merely essential/practical for a person to function in society is a sad and low bar to set for educating our kids.
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Old Sat, Mar-15-2014, 01:39:36 PM   #7
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

lol
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Old Sat, Mar-15-2014, 01:51:48 PM   #8
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

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Old Sat, Mar-15-2014, 03:08:09 PM   #9
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

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Originally Posted by Eau Rouge View Post
Audi average profit margin is not that good; should be a few thousand higher.

Porsche using its name to the skim the market is nothing new. Just ask for a $15k price reduction when you look at a 991S.
Quote:
September 2013
PREMIUM sports car maker Porsche earns more money on every car sold than any other manufacturer in the world, according to a survey by the German-based Centre for Automotive Research (CAD) based at Duisburg-Essen University.

In the first half of this year, Porsche made an average profit of 16,950 euros ($A24,500) per car or around 18.4 per cent of the showroom price, said the survey, published in the popular Autobild motoring gazette.

The figure excludes tax or interest rates and was calculated using reliable operative trading figures.

It also excluded ancillary activities, such as motorcycle production in the case of BMW, or Toyota's property interests.

Behind Porsche in the rankings were Ferrari and Maserati, which both make 15,000 euros per car sold, followed by Audi and BMW, which earn 3,821 euros and 3,495 euros per car respectively.

Porsche is far more profitable on paper than Wolfsburg-based Volkswagen, to which it belongs along with luxury car makers Bugatti and Lamborghini. The CAD study said VW earned an average of 629 euros per car across the range.

This is way behind Toyota, which emerged in the CAD survey as the volume manufacturer with the world's best profit margin of 1,801 euros per car.
http://www.theaustralian.com.au/news...-1226715082483


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Old Sat, Mar-15-2014, 03:13:15 PM   #10
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Default Re: Volkswagen Pockets an average of $23,000 When You Buy That New Porsche

Poor Mazda... literally
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Discussing Volkswagen Pockets an average of $23,000 When You Buy That New Porsche in the Off Topic Forum - Place to discuss this and that. Note: We also have "request to join" forums: Guns and Fitness.
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