It’s no secret that it hasn’t been the smoothest past few years for Porsche. Profits are down, an EV-heavy business plan didn’t quite return the volumes initially expected, the electric 718 has been delayed by years, we’re about to be without a combustion-powered Macan for a bit, and there’s a general volume crunch in the luxury automotive retail market. Porsche’s been in a similar tight spot before, but it’s now adopting a completely different strategy in the hopes of getting out of this one. A strategy that involves a $15 million car.
Flash back to the early 1990s, and Porsche was suffering. Unfavorable exchange rates, a recession, and an aging lineup walloped sales, while old, inefficient production methods ate into margins. The solution was twofold: Trim operating expenses by bringing in Japanese consultants trained in the Toyota Production System, and develop a new line of models that shared as many parts as possible. The 996 Boxster and 996 911 brought things back from the brink, and kept things going long enough for the 955 Cayenne to send profits through the roof.
Today, Porsche is adopting basically the exact opposite plan. Its current vision of profitability involves higher margins on lower volumes of vehicles, and Automotive News reports that sometimes that involves custom work. No, I’m not talking about the high-six-figure Carrera GT factory recommissions (pictured below and in the lead image), although those play a role. I’m talking about breaking the record for the most expensive Porsche ever sold.
As it stands, the most expensive Porsche ever sold at auction was the 917K race car used in Steve McQueen’s “Le Mans” film. The Gulf-liveried car. The 917 many people imagine when they think of a 917. It hammered for $14.08 million at Pebble Beach several years back, and now Porsche is plotting a brand new creation even more expensive than that. It sounds outrageous, but it’s already sold. As per Automotive News:
Porsche is working on 15 one-off projects, Fabig said, with prices per vehicle ranging from €1.62 million ($1,815,166) up to €13.47 million ($15,092,775).
That’s a $15 million car already sold, probably because Porsche might not have been explicitly looking for something like that. See, the marque has a program called Sonderwunsch, German for ‘special request’, that deals with everything from one-off colors to rich guys asking for crazy projects. In this case, it sounds like someone contacted Porsche with an outrageous request, Porsche came up with a quote based on the scope of the project, and a wire was sent. It’s the sort of thing that doesn’t need volume or even limited-run batch production to make economic sense because the margin’s already baked in, and the customer base is just one person.
On the series production side of things, Automotive News reports that Porsche VP of product and individualization Alexander Fabig told journalists, “Future projects could exceed a 200 percent price premium over the base model.” Assuming we’re starting with the current 911 base price of $135,500 before freight, is the world ready for a $406,500 model of 911? While a few one-off commissions have eclipsed that price, a full production run before options hasn’t. Not for the road, at least.
In some ways, going boutique to survive makes sense in a world where Chinese automakers are gaining global ground by the minute. In China, sales of luxury cars by domestic brands are soaring at the expense of foreign brands, and we’re already seeing cars made in China take a big bite out of the retail market in Britain, Australia, and Europe. Mainstream brands feel the pain first; premium brands are next. By and large, the automakers we know have one high card over Chinese upstarts: A feeling certain customers can’t get anywhere else.
The question now is how much will people pay for it? Not one wealthy individual, but a whole bunch, especially at a brand that hasn’t historically been positioned as a direct rival to more exotic marques. Ferrari, Lamborghini, even Aston Martin. It sure seems like Porsche is ready to find out, and we’ll be watching to see what happens with the customers who get priced out. At a certain point, even some of the wealthy will balk at higher prices.
Top graphic image: Porsche
Really, all Porsche needs to do is to get five people to purchase a billion-dollar car and they can turn it all around. Genius!
Shortages of age statement Japanese whisky even when hibiki 21 is four figures. United and Delta yields are blowing up and everyone from American to Qatar are scrambling to add more lie flat, more premium Econ. Lux sub brands like Silversea and Regent are carrying the balance sheets for the cruise lines most people have heard of.
There’s no way to finance a working class into enough volume anymore. There’s no juice left to be squeezed. This is a trend beyond automobiles and I expect we will see more and more sectors give up on the masses and move upmarket. Already the top 10% of earners account for half of all consumer spending and major structural things will need to change for that to not get worse.
You know it’s bad when even the millionaires are getting priced out.
I mean, if someone wants them to do it, will pay for them to make these one offs, and they have employees available to make it happen, go for it. Porsche are already known to have a million tiny, but expensive options for their cars and this is just an extension.
I just made the mistake of using the (other) N-word, so my comment is waiting for approval. Anyway, this is the way of adapting the Porsche Salzburg livery without
making the result look like the German flag between 1933 and 1945.