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Price cuts upset some customers: Porsche Australia
Sportscar maker Porsche salves customers burnt in pricing fire-sale
3 Jun 2013
WHAT do Porsches and refrigerators have in common? Not much, because you can’t treat one like the other, according to Porsche Australia managing director Michael Winkler.
Mr Winkler said a decision to cut up to $36,000 off the price of Porsche models last month as part of a drive to spur sales in Australia had upset about 50 customers who had either missed out on the deals, or taken a hit on future resale values.
Porsche had dealt with all of them to their satisfaction, Mr Wrinkler said, including one customer paying full price for a car three days before the cuts were announced.
“When we made the announcement, we had a process in place for customers to address their concerns,” he said.
“The fact is we had about 50 concerns, with 40 being of a very minor nature – in that they were of a minor financial nature – while 10 customers had what I would say in quotes as ‘a more serious issue’.
“… Naturally we took care of those people and resolved each case without question.”
He said Porsche had looked at each transaction to see if the price a customer had paid was less than the new price when taking the cuts into account.
“… We resolved all those issues and we don’t anticipate any more coming out of the woodwork,” he said.
“These products are not wet goods like refrigerators.
“If we move (prices) up and down and sideways by 30 per cent – and remember more than half of them (Porsche’s customer cars) are financed – you’re then really wreaking havoc with customers’ finance and balloon payments and so on.”
Mr Winkler added that slashing up to $36,000 from Porsche’s price lists would help it burst past 3000 sales a year much earlier than anticipated.
The sportscar maker expects the all-new Macan compact SUV arriving next year to add to a sales boost provided by a run of new metal, including the Cayman two-seater, a facelifted Panamera due in July, October’s 911 Turbo, and the 911 GT3 out early in 2014.
Instead of hitting its target in 2018, Mr Winkler expects to reach the record number as early as 2016.
“I think this is one of the best and most up-to-date product portfolios Porsche has ever had in place,” Mr Winkler said.
“In my mind, with the recent pricing optimisation overall, we might be able to hit 3000 in one of the three of four upcoming years.”
Announced in April, prices for all Porsches bar the soon-to-be-updated Panamera tumbled from between $5500 to more than $36,000.
While the new goal is close to 2.5 times Porsche’s sales last year, Mr Winkler said he did not think it would come at the cost of the brand’s exclusivity.
Porsche’s worldwide plan is to lift sales from last year’s record 141,075 to more than 200,000 units by 2018.
“Is that a risk? I don’t think so,” he told journalists at the Cayman launch in Sydney.
“Consider that just 3000 cars out of over one million registrations overall in Australia is by no means a volume proposition, and worldwide when we’re talking about 70 million to 75 million cars produced per year, 200,000 out of that is certainly not a volume proposition either.
“So I think we’re fairly safe from an exclusivity and brand positioning point of view with that. It does, of course, become more interesting in terms of what we can do with new products going forward.” The price drop was in response to research showing that half of Porsche’s customers preferred to pay less money than to have more standard equipment.
“The approach of adding more equipment was rejected for the simple reason that the cars are already well equipped, and anything that you would choose to add would only meet the desire of about 50 per cent of customers in any case,” Mr Winkler said.
“So rather than pack more stuff in cars that people did not want in the first place, we decided that a price adjustment was the best way to deal with the movement of the market overall.”
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