Porsche, the most profitable Porsche, will raise prices, and in the second half of this year, the price of new models in the United States and Europe will increase by 4%-8%. In its top three sales markets, price increases only bypassed China. Is this a Porsche perk? Some industry insiders said, "If it doesn't rise now, it doesn't mean it won't rise in the future." ”
Two months ago, the industry frequently reported that "Porsche is going to increase prices", and recently it finally landed. But the Chinese market, which accounts for the largest proportion of its revenue, is not among the price increases.
On May 3, German local time, Porsche Chief Financial Officer Meisger said in the first quarter earnings call that he plans to increase the price of new models in the United States and Europe by 4% to 8% in the second half of the year, and it is expected that the base price of its electric models will be 10% to 15% higher than that of the corresponding fuel models.
According to media reports, the spokesperson said that Porsche will not increase prices in the Chinese market, but will continue to pay close attention to profits, demand and the competitive environment to maintain price positioning.
According to Porsche's latest financial report, in the first quarter of 2023, the company achieved sales revenue of 10.1 billion euros (about 76.9 billion yuan), a year-on-year increase of 25.5%; The sales profit was 1.84 billion euros (about 14 billion yuan), a year-on-year increase of 25.4%.
In terms of sales volume, Porsche delivered 80,800 units during the reporting period, an increase of 18% year-on-year. Among them, the Chinese market remained Porsche's largest single market, with deliveries reaching 21,400 units, a year-on-year increase of 21%.
Why did Porsche, which has a strong performance, choose to increase prices at this time? In China, North America and Europe, where it ranks three in terms of sales, why did the price increase bypass China?
01. Profit is better than sales
Porsche's explanation for the price increase was "to offset the impact of supply chain problems on first-quarter profits." Porsche still has problems procuring semiconductors and components for the high-pressure heating system of the all-electric Taycan.
At the same time, supply chain problems have also led to a decline in the profits of its auto finance business. Profit from the business fell to €86 million in the first quarter, compared with €102 million in the same period last year.
Last year, the global external environment changed drastically, and Porsche encountered some supply chain difficulties. In August 2022, due to the lack of key components for matrix headlamps, it was temporarily unable to deliver new Macan and Panamera models.
Although Porsche sales revenue, profit and delivery volume increased in the first quarter of this year, due to the economic situation, rising costs of parts and raw materials, and the increase in R&D expenses, Porsche's return on sales (total profit/total sales) was 18.2%, basically the same as the same period last year, and did not reach the ideal result of 20%.
Li Yandong, a senior researcher at Zhongnan University of Economics and Law, told the "city boundary", "The core factor of Porsche's price increase is to pursue higher profits, and Porsche's sales revenue and operating profit have increased by more than a quarter, and its strong products and sales capabilities have also given it enough confidence to increase prices." ”
▲(Source/Visual China)
Zhong Shi, an expert of the Expert Committee of the China Automobile Dealers Association, also believes that profit is far more important to Porsche than sales. "For many years, Porsche's business philosophy has been to prioritize profit over market share or sales."
Based on the global sales profit of 1.84 billion euros and the delivery volume of about 80,800 vehicles in the first quarter of 2023, Porsche's global bicycle sales profit is about 22,782 euros, that is, Porsche can earn about 173,000 yuan (RMB) for each car sold.
Based on the data of the last three years, according to the current exchange rate of 1 euro equal to about 7.6 yuan, from 2020 to 2022, Porsche's bicycle profit has been rising, 117,000 yuan, 133,000 yuan and 165,000 yuan respectively.
The industry recognizes that Porsche is the most profitable car company, but this does not satisfy it. Fu Xuejun, co-founder of Understanding App, said that Porsche needs huge investment in electrification transformation, which is one of the reasons for its price increase.
At the 20th Shanghai International Automobile Industry Exhibition held in late April, Porsche Global CEO Oberme said that the company's official listing on the Frankfurt Stock Exchange last year means that Porsche will have more autonomy, flexibility and new opportunities, "In the next seven years, Porsche will make it very clear to move towards electrification." ”
According to the previously proposed target, in 2025, the sales of its pure electric and plug-in hybrid models will account for more than 50% of its new car sales; In 2030, the proportion of pure electric vehicle sales should exceed 80%.
To this end, Porsche will invest more than EUR 15 billion in the electrification transition by 2025.
In addition, under inflation, the price of basic new cars in the US market has increased. "If the price does not increase, it is equivalent to automatic depreciation. There are also changes in exchange rates, which may also be the reason for the price increase in the European and American markets. Zhong Shi said.
02. The Chinese market that "cannot be rashly increased"
With a huge responsibility on its shoulders, Porsche is making money quickly. But it is still very cautious about the Chinese market.
Judging from Porsche's recent financial reports, the Chinese market has a pivotal position for it. As of 2022, China has been the world's largest single market for Porsche for the eighth consecutive year.
Although Porsche saw its first 2% drop in deliveries in the Chinese market in 2022, industry insiders believe that this is also due to the fact that Porsche sold so well in 2021, with more than a third of the world's cars sold to China.
In the first quarter of 2023, Porsche continued to lead the world in sales, with new vehicle deliveries up 21% year-on-year to 21,400 units, accounting for about one-third of total deliveries. Porsche said that the increase in deliveries in the first quarter was mainly due to the significant growth in the Chinese market.
As the key "valve" for profitability, Porsche carefully maintains the Chinese market. This is also the reason why it took the lead in increasing prices in the European and American markets, but did not easily change the prices in the Chinese market.
"Price increases may have a greater impact on the Chinese market. Porsche is also maintaining stability and continues its own profit growth. Li Yandong said.
"Shijie" once mentioned in the article "China's "Bai Fumei" Love Porsche" that in the Chinese market, female car owners support half of Porsche's performance.
Porsche China President and CEO Keshimai mentioned in an interview with the media that compared with other markets, the average age of Chinese car owners is the smallest, and the proportion of female owners has reached the highest 50%. "Chinese women are not only Porsche-users, but also have the identity of purchasing decision-makers, buyers and users."
▲(Porsche booth at Auto Shanghai 2023.) Source/Visual China)
Two months ago, a 28-year-old Internet girl who had just become the owner of a Porsche 718 Boxster finally realized her dream of owning a sports car before the age of 30. She told City Boundary that she chose this car because it allows people to "pay small and build big*".
Positioned between ultra-luxury and luxury, the entry-level model is a "luxury" that many owners can reach by saving money.
A male Porsche owner told "City" that the current second best-selling Macan under Porsche is nearly half cheaper than the price of the top Cayenne, but it is 100,000 yuan ~ 200,000 yuan higher than Audi Q5 and Mercedes-Benz GLC, which is another group of middle-class users who "feel that they can drive luxury cars if they are enough to go up".
Porsche is also aware that its core users in the Chinese market are sensitive to price changes. Whether it rises or falls, it can stir up a thousand waves.
At the Shanghai Auto Show, Porsche Global Executive Board Member Feng Peide, who is responsible for Porsche's sales and marketing business, said in the recent price war in China's car market that the price war will only hurt customers' confidence in the product and brand, not a long-term solution, Porsche has never wanted to participate in the price war, let alone be affected by any quantitative targets.
In the eyes of industry insiders, the price increase bypassed the Chinese market, in addition to Porsche's internal desire to stabilize consumers, but also because China is the world's largest new energy vehicle market, Porsche is transforming to electrification and feels heavy pressure from the outside.
On the one hand, Tesla and BYD share the "big cake" in the front. In 2022, Tesla's sales have surpassed "BBA" in the domestic high-end SUV market with a starting price of more than 300,000 yuan.
On the other hand, new automakers including "Wei Xiaoli" and independent brands are desperately catching up, competing to deploy high-end electric vehicles, and "BBA" has not been able to win.
And Porsche, although a notch higher than the "BBA", was after all in the era of fuel vehicles. Nowadays, the Chinese market is the world of new energy vehicles, and Porsche's upcoming pure electric vehicles will inevitably be discussed with other high-end trams in China.
It is planned to start deliveries of the Porsche pure electric car Macan in 2024, and some media have compared it with BMW iX3, Mercedes-Benz EQC, Tesla Model Y Performance, Jaguar I-PACE, Audi Q6 e-tron and NIO ES6.
Fear of Chinese consumers at home and competitors externally. And judging from Porsche's sales data in the first quarter of this year, its electrification transformation is not smooth.
In the quarter, sales of the all-electric Taycan were 9,152 units, down 3% year-on-year, the only sales decline among all models. In response, Porsche responded that this is mainly because there are still certain bottlenecks in the supply chain of pure electric models.
Around the world, Porsche's most popular SUVs are the fuel-based Cayenne and Macan. In 2022, Porsche Cayenne and Macan sold 95,600 and 86,700 units, respectively, accounting for about 58.83% of total sales.
Cao He, president of All-Union Automobile Investment Management Co., Ltd., told "Shijie", "The electrification path of luxury brands has a characteristic, not very anxious, after all, there is the accumulation of brands. Ultra-luxury brands like Porsche may be a little slower than 'BBA'. But when the market reaches a certain size, they will follow and find a way to catch up. According to the market situation in the past two years, they also have to exert their strength. ”
03. Is it only temporary that the price does not increase?
In addition to maintaining high profits, but also opening up a new way of electrification transformation, Porsche, which has always been "sit back and relax", has also begun to be anxious.
In the eyes of the industry, for the top three markets in global sales, Porsche's decision to increase prices in Europe and the United States and not increase prices in China is the optimal solution for maximizing benefits.
However, in Cao He's view, the price strategy of the same model in the European, American and Chinese markets is originally different, and it is more about considering the characteristics of the regional market. "If it doesn't rise now, it doesn't mean it won't rise in the future, and prices in China are already high."
According to Porsche's official website, the recommended retail price of the latest version of Cayenne in China starts at 948,000 yuan, while the same model starts at $79,200 in the United States, which translates to 548,600 yuan.
▲ (2023 Shanghai Auto Show, Porsche booth new Cayenne Cayenne.) Source/Visual China)
According to the highest price increase of 8%, the "market boundary" roughly calculated, in the second half of the year, the latest version of Cayenne in the United States will rise to 85,536 US dollars, or 592,500 yuan.
However, there are too many taxes to pay on imported cars, and it is not surprising that the price is high. To enter China, a luxury car must not only pay customs duties, value-added tax, vehicle purchase tax, vehicles with a displacement of more than 4.0 liters and a price of more than 1.3 million yuan (excluding VAT), but also luxury car consumption tax. Finally, a consumption tax is added to the retail sector.
An industry insider familiar with the luxury car market said that considering the competitive pressure in China and the consumption habits of Chinese consumers, Porsche's pricing strategy in the Chinese market is relatively more complicated. "Although the price of Porsche in the Chinese market is much higher than that in the US and European markets, the price is still relatively close to the people compared to other luxury brands."
On the luxury car "despise chain", Rolls-Royce, Ferrari, Lamborghini and Bentley all surpass Porsche. Some consumers have made this analogy: "Buying a Porsche car is like buying a Chanel bag, carrying Chanel is definitely better than carrying Gucci, but it is far from Hermes." ”
However, Porsche, which is good at making money, does not want to stay under the crowd for a long time, and openly expresses the hope that the brand will enter the high-end market and compete with brands such as Ferrari and Lamborghini.
Like the "BBA", Porsche is also thinking about how to make luxury cars more "proud".
In the eyes of the industry, affected by Tesla, NIO, Ideal, etc. to enter the entry-level luxury car market, Porsche in the period of electrification transition needs to consolidate its position as a luxury car, and only by continuously improving the gold content can it widen the distance from these brands.
And the most direct difference between product positioning is price. According to luxury car sales observations, the richer the customer, the higher the price, the more willing to pay. In this way, the price increase seems to help Porsche strengthen the moat of luxury cars.
Whether this trick will be applied to China in the future, the market is still paying attention. At present, Porsche has given Chinese consumers the reassurance of "no price increase", and at a certain tactical level, it may be a silent attack.
(Author |.) Cheng Liang, Editor | Tian Yanlin)