From the words of Porsche North America’s CEO Detlev von Platen: “Our entry model is our pre-owned program.” Damn. My initial reaction was a bit strong:
I have a few good reasons for that frustration! I’ve grown up around Porsches; I have enjoyed my 944, the 914 we had in the family when I was old enough to drive, and I want to buy another Porsche sometime soon. I have a couple things in the way right now: a new baby girl, and a day job that doesn’t make six figures (yet!), so I’m not really able to sign off on that 981 Cayman S this week. I was really looking forward to a new entry model for 2020. That Porsche would declare their used market an entry-level vehicle might have serious ramifications for the enthusiast community.
Was PCNA’s CEO Thinking Clearly When He Said It?
I hope he wasn’t – because that position indicates either indifference or ignorance, unless he was dissembling which is another story altogether, and I can’t say Porsche has ever been indifferent to their customers. For a minute, let’s table the discussion about whether this decision shows commitment to not diluting the brand; let’s table the discussion about whether it’s appropriate for Porsche to even throw a furtive glance at any market with the word “entry” in front of it.
A Quick Look At Entry Level Vehicles
It may be a bit of marketing 101, but bear with me and let’s talk about entry-level vehicles. An entry model is not a flagship. It’s not supposed to have the extra features, the gobs of horsepower, the poshness of a top-of-the-line model. Entry models are handshake cars, meant to convey the spirit of the brand, even at a lower price point. It’s supposed to be reliable enough and engaging enough to satisfy a customer’s needs through the life of the vehicle. When they want or need something new, and their first experience with a company’s car was positive, customers will typically try to buy from them again. Entry model cars are always a cost to consumers, but they can also be an investment by the manufacturers. Manufacturers create entry models to entice buyers to stick with them as they drive through life.
Generally speaking here, an entry-level price also means entry-level performance, in exchange for a more reliable car, which makes the total cost of ownership more affordable – hence, entry level. Let’s bring Porsche into the discussion again.
There are some exceptionally great deals for used Porsches. Need a family car? A 2004 Cayenne Turbo used to cost over $110,000, or more, with options. Now, with 60,000 more miles and ten years, it’s less than $25,000.
2000 Boxster? Those used to be $50-60,000 with the right options. This one can be yours for less than $15,000. 42,000 miles covered in 14 years.
Better yet, what about a nice 964? The Carrera 2 coupes were about $55,000 back in 1991 (Adjusting for inflation, that’s a little over $96,000 spending power of today’s dollar)… but for only $24,000 2014 dollars, you can get this striking white over blue coupe (sigh, sadly with only two pedals!)! It looks like it needs a bit of work, and with 141,000 miles, that sentiment is probably more true than the seller would care to admit.
When you’re looking for an entry-level sports car, like the Volkswagen GTI, or the BMW 228i coupe, or the Subaru BRZ, these cars are competitively priced! That Boxster costs about half as much as an entry-level BMW coupe – what a deal!
Again, entry-level considerations are pervasive throughout the ownership experience – the purchase of the vehicle is only one component. Look at that 2004 Cayenne Turbo up there. You think that 4.5 liter, 500 horsepower motor comes with entry-level maintenance costs? Absolutely not! You’re buying a $25,000 car, but you’re maintaining a $110,000 car! That means this car is way outside the budget for someone looking for a $25,000 car, unless the buyer is a shortsighted idiot (having bought a Porsche partially because it was going to cost the same as a used Accord, I can resemble that insult).
Smart Buyers Know That The Price Of The Car And The Cost Of Ownership Are Considerations To Make Prior To The Purchase.
So for smart, up-and-coming folks looking to buy in to the Porsche brand, but can’t afford the $60,000 Boxster, much less the $90,000 Carrera (Yes, I know those retail for $51,400 and $84,300 respectively, but add taxes and title fees and the fact that very few of these cars leave with ZERO options… I’ll stick with my prices.), what are their options? A $29,000 996 C2S with over 100,000 miles? One IMS failure and they’ve almost doubled the amount of money put into that car. How’s that for a hearty Porsche handshake? “Welcome to the brand! Our cars are much less hassle when you can buy them new.” Can Porsche hang their hat on a used market for “entry-level” cars? I don’t think so. They’re trusting Porsche owners, former Porsche owners, the children of Porsche owners (who sneak the car out for a weekend drive), snarky valets – and more – to take care of a 5, 10, 20 year old car that will provide a great first experience for new Porsche owners. That business model is more risky business than a 928 driver’s seat molded to fit Tom Cruise’s butt cheeks.
If the used price and cost of ownership is comparable to the price of a new car, it’s going to be hard to get lifetime customers. By that, I should clarify, new purchases from lifetime customers. You want to talk about fear of diluting a brand? What happens to all the classic Porsche models – not the rare ones like speedsters or 993 turbos, mind you, just any older Porsche – what happens to the condition of our used market, when the entryway to Porsche ownership is perpetually littered with buyers who can’t afford to maintain the vehicle they’re acquiring, and sellers who can’t afford to fix what went wrong? I fear the quality of the used market will suffer horribly over the next few decades. Cars in good condition will become scarce, inflating their values, building up steeper walls between Porsche ownership and – merely driving.
How Will It Affect Enthusiast Numbers?
I believe that level of exclusivity will certainly keep folks out unless they’re of a certain net worth. How will it affect enthusiast numbers? For altogether different reasons (I can’t stress that enough!), the hot-rod enthusiast community has been experiencing a severe downturn in events and numbers because of certain expectations with ownership. As a result, the only folks who have those old modified classics are the same guys who owned them fifteen, twenty years ago – a group who, inexplicably, seem to be dying out. Without a realistic entry into the Porsche lifestyle, I wonder if the average age of Porsche owners will spike up in the next fifteen years if they continue to maintain this path.
I myself have seen the winds change. Five years ago, I was unmarried, working fresh out of school and looking at 1990 Carrera 2 prices because I wanted to upgrade from my 944. Carrera 2 examples around 100,000 miles were selling near $15,000. Marriage, finding a new job, buying a house, having a baby, and five years later, I look up the same car and prices have almost doubled. Sure, I’ll keep making more money, and I’ll eventually find a 964 that suits me, but my path forward with Porsche ownership now presents decidedly fewer choices. If the pre-owned program remains Porsche’s entry-model of choice, I fear that trend will continue to worsen.
Is that too crazy? Am I missing something? Am I putting way too much value in a passing quote from Porsche? What’s your position on this!
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