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      03-22-2017, 03:32 AM   #23
InTheNightKitchen
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Quote:
Originally Posted by red-sauerkraut View Post


With many adding a huge heap of pork fried rice right on top of all the sauerkraut, bless their little hearts!

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Originally Posted by M3 Adjuster View Post
...as intended , brought many newer, younger enthusiasts to the brand
Wtf? Maybe I'm a little sensitive and just misinterpreting this wrong. Sounds like your saying Asians have come to a German brand?
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      03-22-2017, 04:44 AM   #24
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Originally Posted by B///MWGuy View Post
As much as I'm hoping this post is accurate... I still think there's a huge catch in the calculation. Is the full calculation available somewhere?
They told you it in the article. Never studied basic math?

AVG: $ profit/# cars sold
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      03-22-2017, 04:45 AM   #25
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Originally Posted by InTheNightKitchen View Post
Wtf? Maybe I'm a little sensitive and just misinterpreting this wrong. Sounds like your saying Asians have come to a German brand?
No one cares about your emotions.

He's saying kids buying JDM are looking at BMW.
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      03-22-2017, 07:05 AM   #26
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This figure is only meaningful if presented as a % margin. Obviously Porsche makes more profit per vehicle, their vehicles are also on average at least twice the price.

I am curious to see how much margin BMW makes on each model.
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      03-22-2017, 07:37 AM   #27
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Quote:
Originally Posted by InTheNightKitchen View Post
Quote:
Originally Posted by red-sauerkraut View Post


With many adding a huge heap of pork fried rice right on top of all the sauerkraut, bless their little hearts!

Quote:
Originally Posted by M3 Adjuster View Post
...as intended , brought many newer, younger enthusiasts to the brand
Wtf? Maybe I'm a little sensitive and just misinterpreting this wrong. Sounds like your saying Asians have come to a German brand?
That was the friendliest interpretation of that I could come up with and I decided to just take the high road and not reply.
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      03-22-2017, 08:02 AM   #28
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Quote:
Originally Posted by KGB_123_99 View Post
This figure is only meaningful if presented as a % margin. Obviously Porsche makes more profit per vehicle, their vehicles are also on average at least twice the price.

I am curious to see how much margin BMW makes on each model.
Exactly.

What would be interesting is the margin on a 7 series or an m6 for example. See if that is comparable to a porsche.

Going off the entire company is meaningless as bmw sells many many low profit cars in very high volumes, so that total profits are much more then porsche.
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      03-22-2017, 08:05 AM   #29
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Is the 5K per car based on the cars being sold @ MSRP?

I don't think Porsche made $17,700 on my 981, because I was able to negotiate a nice % off MSRP - of course, I am sure they made good money, but because each car sold will have variations in terms of the negotiated price, I wonder how they came up with these figures.
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      03-22-2017, 08:15 AM   #30
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Quote:
Originally Posted by M3 Adjuster
After seeing the article regarding the average Porsche profit at $17,xxx I feel a lot smarter being a lifelong BMW guy.


The BMW 1M and M2 are examples of low margin vehicles from BMW by the way, and have done exactly as intended , brought many newer, younger enthusiasts to the brand
You really need some more data points before deciding Porsche buyers are getting killed comparatively. Just guessing but the average P-car has to be 2x at least what the average BMW costs due to high volume of lower end 3-series selling at what $40k or less? From a margin perspective I don't see them making 3x the % BMW. Premium sure but not that bad.

Either way for manufacturing companies the margins are about in line to better than what you'd typically see.
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      03-22-2017, 09:02 AM   #31
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I thought the 228i was the cheapest? 32,850 vs 33,100 for an X1
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      03-22-2017, 09:03 AM   #32
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I believe this average is based on when BMW sells the vehicles to the dealers and not the final sale to the customer.
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      03-22-2017, 09:39 AM   #33
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None of this is a surprise, really.

Porsche has always had a higher profit margin per vehicle than BMW.

For every 1 Porsche, 10 BMWs are made... BMW has a different business model - appealing to mass market. However, BMW only has 2x the amount of R&D costs compared to Porsche. So does that mean more engineering goes into each Porsche?

BMW also competes in a more competitive market with MB, Audi, Lexus, basically any 'premium brand', whereas Porsche has fewer competitors (especially for their sports cars). This allows Porsche to price their vehicles higher by placing a value on the 'Brand' or uniqueness of their vehicles. There's no question you pay more for the Porsche brand. Ferrari even more so.

If you're a value buyer, yes BMW makes less money off of you (whether that is from lower price points or less efficient operating model). If you look at GM/Ford, I'm sure they make even less money off you. GM/Ford are like the Wal-Mart of the car world.

Perhaps Porsche is a more efficiently run company playing in a semi-niche market where they can set the price more freely. Like I said, different business model. Thank goodness, cars are not commodities (yet) so P&L statements only tell a part of the story.
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      03-22-2017, 09:46 AM   #34
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Quote:
Originally Posted by Fahrvergnügen View Post
None of this is a surprise, really.

Porsche has always had a higher profit margin per vehicle than BMW.

For every 1 Porsche, 10 BMWs are made... BMW has a different business model - appealing to mass market. However, BMW only has 2x the amount of R&D costs compared to Porsche. So does that mean more engineering goes into each Porsche?

BMW also competes in a more competitive market with MB, Audi, Lexus, basically any 'premium brand', whereas Porsche has fewer competitors (especially for their sports cars). This allows Porsche to price their vehicles higher by placing a value on the 'Brand' or uniqueness of their vehicles. There's no question you pay more for the Porsche brand. Ferrari even more so.

If you're a value buyer, yes BMW makes less money off of you (whether that is from lower price points or less efficient operating model). If you look at GM/Ford, I'm sure they make even less money off you. GM/Ford are like the Wal-Mart of the car world.

Perhaps Porsche is a more efficiently run company playing in a semi-niche market where they can set the price more freely. Like I said, different business model. Thank goodness, cars are not commodities (yet) so P&L statements only tell a part of the story.
You hit the nail on the head.

Unfortunately, this is why BMW has had to water down their cars big time. Porsche, aside from the electric steering, is still a true driver's car.
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      03-22-2017, 09:54 AM   #35
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Quote:
Originally Posted by Germanauto View Post
You hit the nail on the head.

Unfortunately, this is why BMW has had to water down their cars big time. Porsche, aside from the electric steering, is still a true driver's car.
Thanks, but IMO, Porsche has one of the best (maybe the best) electric steering setups of all manufacturers. The software engineers have done an incredible job fine tuning it. I like it as much or better as my 1M. The newer BMW models (like my previous M4) had ok steering if you weren't turning but as soon as you turn the wheel it feels like a rubber band, Porsches do not.
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      03-22-2017, 10:14 AM   #36
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Quote:
Originally Posted by M3 Adjuster View Post
The BMW 1M and M2 are examples of low margin vehicles from BMW by the way, and have done exactly as intended , brought many newer, younger enthusiasts to the brand
That's exactly right.
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      03-22-2017, 10:31 AM   #37
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Quote:
Originally Posted by Fahrvergnügen View Post
Thanks, but IMO, Porsche has one of the best (maybe the best) electric steering setups of all manufacturers. The software engineers have done an incredible job fine tuning it. I like it as much or better as my 1M. The newer BMW models (like my previous M4) had ok steering if you weren't turning but as soon as you turn the wheel it feels like a rubber band, Porsches do not.
Yeah but it's still not what it used to be. Still, Porsche is above and beyond the competition in that regard.
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      03-22-2017, 10:47 AM   #38
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A friend of mine just ordered an M140i hatch in the UK and received a 17.5% discount off of msrp...picking it up next week.

Just curious, surely this means BMW would lose money on a car sold at such a discount?

I know its normal for porsche to see ~15% discounts in certain models but still.
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      03-22-2017, 10:48 AM   #39
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Quote:
Originally Posted by dmboone25 View Post
Is the 5K per car based on the cars being sold @ MSRP?

I don't think Porsche made $17,700 on my 981, because I was able to negotiate a nice % off MSRP - of course, I am sure they made good money, but because each car sold will have variations in terms of the negotiated price, I wonder how they came up with these figures.
Porsche did, your dealer not so much.
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      03-22-2017, 10:50 AM   #40
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So profit is bad?
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      03-22-2017, 11:08 AM   #41
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mcdonalds makes 5000% profit on your soda

Last edited by G35POPPEDMYCHERRY; 03-22-2017 at 11:09 AM.. Reason: 500 to 5000 lol
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      03-22-2017, 11:27 AM   #42
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The calculation is somewhat crude and misleading. It does not back out profits realized from other revenue streams. Such as parts sales, financial services, lifestyle apparel, cpo sales, etc.
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      03-22-2017, 11:38 AM   #43
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Quote:
Originally Posted by dmboone25 View Post
Is the 5K per car based on the cars being sold @ MSRP?

I don't think Porsche made $17,700 on my 981, because I was able to negotiate a nice % off MSRP - of course, I am sure they made good money, but because each car sold will have variations in terms of the negotiated price, I wonder how they came up with these figures.
I got my cayman S few years ago at invoice. From the mouth of the finance guy - ok we are selling the car to you at invoice since the GM said it's ok they just made a sale on a Turbo.
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      03-22-2017, 12:03 PM   #44
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Originally Posted by outie View Post
I got my cayman S few years ago at invoice. From the mouth of the finance guy - ok we are selling the car to you at invoice since the GM said it's ok they just made a sale on a Turbo.
BMW AG's profit per vehicle is not affected by the discount you receive from your dealer.

BMW AG sells cars to BMW USA (sole importer to the USA) at a certain price, this revenue is what it reflected in their income statement, alongside costs. BMW USA then distributes cars to their dealer network at their invoice. This invoice (the invoice you speak of) is higher than what BMW AG charges BMW USA so that BMW USA can stay in business.

By the time a BMW is sold to the end customer, BMW AG has already recorded the sale - which is what the article is stating.

Same idea for Porsche... PAG-->PCNA-->Dealerships-->Customer
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