Porsche’s net profit on each vehicle went up 9% in 2016 to $17,250 but Ferrari earns almost $90,000

Article by Christian A., on March 22, 2017

Have you ever wondered how much luxury car companies profit from every vehicle they sell? And which companies profit more? Well, in 2016, Porsche sold over 238,000 vehicles. That is quite a huge number considering their cars are very pricey, but it doesn’t end there.

That number then translates to a total operating profit of €3.9 billion ($4.1 billion), which according to Bloomberg, is a fourteen percent increase since 2015, and a net profit of $17,250 per unit, with a nine percent increase as well. In other words, for every Porsche 911 sold, the profit amounts to the value of a new car by another brand.

Other companies such as Daimler AG and BMW, which both have roughly the same margins, have a net profit of about $5,000 per vehicle in 2016. But none of the above (Daimler, BMW, or Porsche) can compare with the amount this other company is earning.

Wild guess anyone? It’s none other than one of the biggest names in the industry, Ferrari.

So how much more you ask? According to reports, the Italian supercar company makes a net profit of almost $90,000 per vehicle in 2016. And it wasn’t just last year, but for years, it has been at the top of its game when it comes to profit.

It doesn’t end there, that profit also comes from car accessories, engines, and amusement parks - that is over 30 percent of the business. Plus, that doesn’t explain the 8,000 cars the company sells annually. So I would say their strategy is to sell fewer cars but with more bloated price tags.

Porsche’s annual output has increased by 47 percent in the last three years, and is now equivalent to about one-tenth of BMW’s production size. A huge percentage of Porsche’s sales (that’s 40 percent of it) comes from their new Macan SUV, being one of the most affordable models at $47,500 for the entry-level unit, it is also the company’s best seller.

Chairman of the Porsche executive board, Oliver Blume said that they are “concentrating on delighting customers” by coming out with a number of accessories just like the smart watches built via a collaboration with TAG Heuer with 4,000 configurations. The prices vary but may go up to $17,000.

To cap things off, Porsche gets a total revenue of about $99,000 per vehicle sold. But good thing is that this comes with impeccable customer service, responding to every possible need that its customers can have related to their cars.

Source: Bloomberg.com

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