Porsche already enjoys this highest profit margins in the car business. But, this has always been somewhat seasonal with the rest of the car industry - demand for a new model gets everyone excited to pay close to sticker price, they fly off the shelves at first and then languish until Porsche releases some killer lease pricing (using the Dudestuff Decent Lease Rule of Thumb - 1% of the original MSRP is a decent lease.) and then they start selling again. This played out when the refreshed 997 came out in 2009 with Porsche's first direct fuel injection motor, with a large power bump and greater efficency. Initial feeding frenzy, followed by a cooling and some quirky builds languishing on the lots. Same thing with the New 911 in 2012, the launch of the 991 was incredibly confusing as it happened in the middle of the 2012 model year, where you could get a 2012 911 that was either a 997.2 or a 991.1. (the .1 or .2 suffix is the Porsche way of saying a mild refresh, like BMW's Life Cycle Impulse [LCI] mid body style refreshes.)
This is all well and normal for the car industry, but some strange things have happened with Porsche's limited production cars, and their dealers are making a ton of money from it.
This all started in 2010 with the announcement of GT3 RS. We were just coming out of the automotive crisis of 2008-2010 where manufacturers had to adapt to rising gas prices. Sales were on the rise, and the European manufacturers were less affected due to increased MPG ratings and taxes already. They were already making a lot of progress towards direct injection (for better combustion and efficiency) and turbo charging.
Porsche had a whole bunch of hot 2011 models to talk about:
In April, Porsche announced that the "regular" RS was no longer top dog, announcing an even more limited edition RS 4.0. This car was going to be sold only in limited quantities, with again, the dealers deciding who got what. They were getting $10-$15k over sticker for ordered cars and only 600 in total were built. Today, these cars are trading at over double their original sticker price.
How the heck did we get here, where a "normal" bodied Porsche is more expensive than brand new super cars? It uses the same overall body as a pedestrian $65k (on the used market) 997.2 C4, with a hot motor, but fetches some pretty impressive pricing.
Limited edition Porsche values have gone nuts (along with some other cars, like the BMW E30 M3.). The 993 has really enjoyed a run up of prices, even base cars that were worth $40k 5-6 years ago, are worth $75k now, a pretty stunning rate of return on anything. Similar valuations changes at the high and the low end of the market. 80s 911s went from $10k cars to $25k+ cars. Collectors are nostalgic and the high end car buyers have more money and are putting more money into alternative investments. People who grew up with whale tail 911 are driving up prices as well.
This has caused a crazy buying frenzy in 2013 when the 2014 GT3 was announced. Dealers began profiteering immediately, and people were throwing money at them to reserve spots in line, even before order banks opened up. Due partially to CAFE averages, and the GT3 getting a combined 17MPG and paying a $1000 Gas Guzzler tax, the production of the GT3 has to be limited to avoid paying larger CAFE fines. Many people with dealer relationships were getting cars at MSRP and then flipping them for profits - $20k-$30k over MSRP. The frenzy was real and despite being in their 3rd model year, are still fetching close to MSRP for 2014 cars and over MSRP for 2016. If you'd been one of the lucky people who got a 991 GT3 at launch for MSRP, you could have probably driven it and sold it for the price paid.
2015 got even nuttier. Porsche announced the 2016 GT4, a Cayman-based mid engine car in February and announced the 991 GT3 RS in March of 2015 and things went really nuts. Some people got GT4s at MSRP, but many paid mark ups on the less than 2000 cars produced. Almost all GT3 RSs got sold with markups, from $50-$100k, some even higher. These price jumps were taking them into a whole different class of automobile, with many decreeing that the profits weren't there.
The strange thing is that Porsche itself is not getting the benefits of these profits, rather the dealerships are. They are making big chunks of money on the markup, since that money goes all to the dealership - the only thing Porsche makes is the invoice price of the car, and whatever profits are built into that, along with franchise fees. And, the dealerships aren't exactly getting rich over these cars, the volumes are so low. With less than 2000 GT4s sold, even really large dealerships might have sold 8 or 9. They may have made $10-$20k on these cars, which is certainly nice, but not exactly life changing money at the GM level. The sales guys probably made out pretty decently on them.
Porsche tried to capture some of the frenzy with the release of the 911 R. This was to be the ultimate driver's 911, a widebody car, with the best naturally aspirated motor, straight out of the GT3 RS, with a manual transmission, no back seats, custom lightweight Pepita Houndstooth carbon buckets. 500 hp and a curb weight of just 3021 lbs. This model was limited to 991 units world wide. Porsche has been so focused on PDK (over half of their cars with a PDK or manual option are PDK) that enthusiasts have been clamoring nostalgically for 3 pedals. The only 911 Rs available are being sold at a huge markup, after being offered to the 918 owners first.
Porsche, interestingly enough, fed some of this feed frenzy by themselves. They released the 991 GT3 as PDK only - 3 pedal manual fans were left out in the cold. This helped the manual only 997.2 GT3 (and the RS / RS4.0) prop their values up - the 997 GT3's original MSRP was $113,500, although most were sold with at least $10k-$20k of options. They are still trading today (Spring 2016) used with 15-20k miles on them for almost MSRP. ($115-$125k seems to get you a clean car, with the later ones, with nose lift and carbon buckets fetching higher prices.)
Rumor has it (and Porsche is not exactly Fort Knox when it comes to information leakage) that the revised 991.2 GT3 will have the option of a manual transmission. Likely this is going to have an interesting affect on the market - options have a huge affect on the market because the target audience is larger than the supply of cars. Normally, a mass produced vehicle wouldn't be so subject to these whims, but when you're talking about a total production run of 600 cars, things get strange really quickly.
The newer GT cars have a habit of being faster than the previous cars. There are a lot of people that buy them for track days because they are relatively easy to go pretty fast in, and they are extremely satisfying to drive. If the 991.2 GT3 indeed comes standard with or has the option of a manual transmission, there will be a decent number of 997.2 GT3 owners that sell and upgrade to the newest body, since they can now get it with a manual transmission. And, there will be a decent number of 991.1 GT3 owners that sell their cars for the newer GT3. Because the new ones won't be significantly more expensive than the previous gen, this will drive used prices down. 997.2 GT3s are trading at $115-$125k right now, with 991.1 GT3s trading between $140-$160k, I predict both of these ranges take a $15,000 hit, so $100-$110k for a 997.2 GT3 and a 991.1 GT3 at $125-$140k. At $125k, the 991.1 GT3 becomes a VERY appealing automobile... yet still just barely below it's original selling MSRP! I'll come back to this post in a year to see how right I was.
The other thing that will be interesting is what happens to GT4 prices. So far, people are still paying over MSRP for low mileage used cars right now, and production is ending - we'll see the last new deliveries in August. The dealers are profiteering like crazy on them with Paint to Sample (PTS) cars being asked at $35-$40k over MSRP. We'll see if the market will support that. They are the "volume" GT car and are being sold at an interesting price point - they are cheaper than the regular 911, and have the same motor - you're giving up the rear engine dynamics and a back seat, for a smaller, more focused performance package in the GT4. The regular (non-gt3) 911 will depreciate like a normal car, the early 2012-2013 991 911s are selling in the $70-$80k range, far from the $115-$130k they sold for new, with options.
Normal cars depreciate - Porsche's GT cars not doing so has been an interesting influence of market dynamics. I suspect that this will not continue, an economic correction will affect the collector car market which will trickle down to more modern used cars as well. The ultra high end of the market will likely not change much, but the mid range and driver class classic cars are likely due for a correction after the run up from 2010. Hopefully a cooling and not a real crash, this time. Some cooling has already happened at the upper end of the 993 market at auction, so keep an eye on that space as well, because it will spill over in the newer and older markets as well. Part of the demand of Porsche's limited edition models is speculation for appreciation in the medium term. If the collector market takes a hit, those storing more modern cars will either liquidate or hold long term, for those willing to bear the storm.
I for one, am looking forward for the 991.1 GT3s to come down a bit in value. They're really a fantastic car, and in a world moving towards turbo charging, even though a PDK transmission, the naturally aspirated 9000 rpm motor is a pretty fantastic way to go. The purity of response and linearity of power build is something you rarely get out of a turbocharged car, and people may look back on the 991.1 as one of the greats.
Silicon Valley Dad, who loves cars, cooking, clothes and cameras