Luxury car brand Porsche makes $17k profit per car.
Overall operating profit rose by around $4bn. That’s an increase of 15% since 2015. Meanwhile, overall output is up 50% from 2014.
Its helped parent group VW, still trying to get over the emissions scandal, post strong profit growth results last quarter.
It’s all about the brand
Porsche don’t make cheap cars.
And whilst their engines and interiors do have a bigger price tag than an average car, they make consumers pay for the brand. They know that having “Porsche” emblazoned across a bonnet is one of the biggest reasons why customers are willing to part with a lot of cash to own one of their products.
It’s one of the reasons why Porsche has a bigger average margin than rival luxury car brands Daimler and Mercedes.
Whilst these 2 do make luxury cars on the same level as Porsche, their average margin is lower because they have “entry level” cars, with a smaller price tag. And you could argue that these 2 have diluted their “luxury” credentials, by selling cheaper models.
Enter: The Macan
However, this hasn’t stopped Porsche from launching its own basic model, retailing at around $45k. Although, don’t expect many of these to be sold: who goes into a pizza place for the salad?