Porsche 911 'elitist' price peril

The ever-escalating price of the iconic Porsche 911 has become a significant concern for the German sportscar manufacturer’s Australian subsidiary.

"We are in danger of going away from being premium to being elitist and that is not lost on the management of Porsche in Australia," spokesman Paul Ellis told motoring.com.au at the global launch of the all-wheel drive 911 Carrera 4 and 4S coupe and cabrio in Austria overnight.

The pricing – as well as equipment and technical details – of the new 991 generation all-wheel drive 911s was pre-released in August, around six months before their Australian arrival next February-March.

The most expensive of the four models launched overnight, the 911 Carrera 4S Cabriolet, is now pitched at $315,000, the first time this model line has broken through the $300,000 barrier. That’s a climb of $21,600 over its predecessor and an increase of more than $50,000 since September 2008 when the Series I 997 generation 911 was discontinued. The increase hasn’t been so pronounced for the base model rear-wheel drive 911 Carrera Coupe in the same timeframe, but it has still gone up almost $30,000 to $229,400.

While the arrival of the 991 generation has boosted 911 sales in Australia marginally year-on-year, it is known that its prices have caused even the well-heeled clientele that shop for Porsches to baulk. Option prices have compounded the issue. The PDK dual-clutch gearbox, which has a 90 per cent take-up rate in Australia, adds $5950 to the price of a 911.

Mr Ellis said that Porsche Cars Australia was in constant dialogue with its parent about pricing issues and solutions to them.

"There are solutions but it is not necessarily up to us (Porsche Cars Australia) to determine the level of the solution," Mr Ellis said. "We can request, we can provide objective market data that supports our claims, and that is basically what our responsibility is.

"We can plead the case, but beyond that we are not the judge."

Mr Ellis did defend price rises for 911 as part of the cost of introducing new technology. For instance, the Series II 997 911 introduced PDK and a new generation of direct injection boxer engines. The 991, which started rolling out in late in 2011, is a 95 per cent new car and only the third in the 49 year history of the 911 that could be described as a clean sheet design.

"There is an expectation from the factory that we put up prices and there is also an engineering depth to an all-new model and that costs," Mr Ellis said. "It’s the cost of developing new things that go into the car, it’s the cost of producing the things that go in the car. That has to be paid for."

Mr Ellis also pointed to federal and state government taxes that added significantly to the 911’s price tag.

"You have got luxury car tax, you have got GST, you’ve got stamp duty and you’ve got import duty; on a $260,000 motor car that’s about $90,000 that goes straight to the state and federal governments."

Variances in exchange rates that had allowed other car companies to lower prices in recent times did not aid PCA he said.

"We don’t get any benefits with the fluctuation of the currency. All the risk is taken by the parent so therefore all the gain or loss is taken by the parent. Our currency rates are locked in for a minimum of 12 months and the factory determines the exchange rate.

Mr Ellis explained that comparisons with 911 pricing in the USA, where Porsches are much cheaper (the Carrera coupe starts at US$82,100), were also not valid for several reasons apart from the heavier Australian tax impost.

"We have a much higher standard of specification on our cars than they do in the US, and spec equals dollars," Mr Ellis said. "Also, we sell 1500 cars per year in Australia and the USA sells 35,000, so they are in a much stronger negotiating position on price. We are a much smaller voice, we don’t have the same power. That is the reality."

Mr Ellis dismissed the chances of a lower-specification and therefore cheaper version of the 911 going on-sale in Australia: "I don’t think it can happen because then you are altering the expectation within the market from your customer base and also altering dangerously where you fit within the hierarchy of competitors."

He also defended the continuing importance of the 911 in the Porsche lineup, even though by 2015 the vast majority of sales will be Cayenne and the forthcoming Macan SUV.

"People need to see 911s on the road, people need to drive 911s, people need to be talking about 911s, because it just makes the Cayenne all the more acceptable."

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