Porsche prices will rise in the UK after Brexit

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Porsche is a German car manufacturer specializing in performance cars, sport utility vehicles (SUVs) and sedans (sedans). It was founded in Stuttgart, Germany, in 1931 and is part of Volkswagen AG.

Porsche has always been one of the most profitable car manufacturers in the world. Indeed, he has often been considered a seller of luxury goods, not just motor vehicles. According to Bloomberg Data, the company realized an average profit of € 15,000 ($ 17,000) on each of the cars sold last year. In contrast, the other two major German brands, BMW and Mercedes Benz, earn on average, on their range, 4,400 euros ($ 5,000) per vehicle.

The UK is one of Porsche's most important markets, with 256,000 cars sold worldwide last year, of which over 12,500, or 4.9%, in the UK.

However, even an industry builder such as Porsche can not ignore the impact of Brexit and the company has warned its British customers that they could face a 10% premium for vehicles delivered in the UK following the Brexit.

Porsche has asked its potential buyers to sign a document containing a clause providing for a possible fare after the departure of the United Kingdom from the European Union (EU). It must be added that Porsche has described the pace simply "precautionary".

Porsche AG said:

"… in light of this [Brexit]we have chosen to inform customers whose cars may arrive after Brexit to warn them that they may be affected by this tariff, allowing them to be fully informed at the point of sale and, if they wish, adjust their order accordingly. … This is a precautionary measure to allow our customers to plan ahead. … "

To put this in context, an additional 10% would match the cost of Porsche's most famous car, the 911, increasing from 93 to 110,122 ($ 119,180) to 102,421 ($ 131,100). Now, one could say that if one can afford to pay £ 93,000 for a car, £ 102,000 is not that bad.

However, Porsche's makeup may be in decline as the Macan SUV and Boxster models start at around £ 46,000 ($ 59,000). If we add 10%, if the price is then raised to 50,600 pounds ($ 64,768), it is possible that models from other prestigious manufacturers could steal some of Porsche's sales.

Are there broader implications? Given that Porsche is just one example, although a significant part of the Volkswagen group can really find out if such a potential price increase needs to be applied to other brands in the family? These are Audi, Bugatti, Lamborghini, Seat, Skoda and the Ducati motorcycle manufacturer. Until now, Volkswagen has only said

"… We are watching the situation closely and looking at the full range of possible effects … We note with regret that there is currently a reprieve regarding the decision on the negotiations. [Brexit] treat. For us, this means a new period of insecurity and planning uncertainty. We continue to prepare for all eventualities … Regardless of this, the UK will remain an important market for the Volkswagen Group, the second largest in Europe. … "

However, Porsche said:

"… we need global clarity on future relations between the UK and the EU very quickly. …"

Tailor-made nature and attention to detail may mean that customers who have deposited deposits on a new Porsche car must wait an average of five months before delivery. Any customer who placed an order and paid a deposit on 17 January 2019 will not be affected by the change.

Can we expect similar moves from other European manufacturers where all cars are imported to the UK?

President of the Automobile Association (AA), Edmund King, said:

"… Import tariffs alone could increase the list price of cars imported from the continent to the United Kingdom by an average of 1,500 pounds ($ 1,920) if the brands and their retail networks were not able to absorb these additional costs. … "

Brexit turns out to be a bumpy road.

Stephen Pope ~ MarketMind

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Porsche is a German car manufacturer specializing in performance cars, sport utility vehicles (SUVs) and sedans (sedans). It was founded in Stuttgart, Germany, in 1931 and is part of Volkswagen AG.

Porsche has always been one of the most profitable car manufacturers in the world. Indeed, he has often been considered a seller of luxury goods, not just motor vehicles. According to Bloomberg Data, the company realized an average profit of € 15,000 ($ 17,000) on each of the cars sold last year. In contrast, the other two major German brands, BMW and Mercedes Benz, earn on average, on their range, 4,400 euros ($ 5,000) per vehicle.

The UK is one of Porsche's most important markets, with 256,000 cars sold worldwide last year, of which over 12,500, or 4.9%, in the UK.

However, even an industry builder such as Porsche can not ignore the impact of Brexit and the company has warned its British customers that they could face a 10% premium for vehicles delivered in the UK following the Brexit.

Porsche has asked its potential buyers to sign a document containing a clause providing for a possible fare after the departure of the United Kingdom from the European Union (EU). It must be added that Porsche has described the pace simply "precautionary".

Porsche AG said:

"… in light of this [Brexit]we have chosen to inform customers whose cars may arrive after Brexit to warn them that they may be affected by this tariff, allowing them to be fully informed at the point of sale and, if they wish, adjust their order accordingly. … This is a precautionary measure to allow our customers to plan ahead. … "

To put this in context, a 10% surcharge would take the cost of the most famous Porsche car, the 911 to the entry level, from £ 93,110 ($ 119,180) to £ 102,421 (131 $ 100). Now, one could say that if you can afford to pay £ 93,000 for a car, then £ 102,000 is not that painful.

However, Porsche's makeup may be down, with the Macan SUV and Boxster models starting at around £ 46,000 ($ 59,000). If one adds 10%, if the price is raised to £ 50,600 ($ 64,768), it may be that models of other prestigious manufacturers can steal some of Porsche's sales.

Are there broader implications? Given that Porsche is just one example, although a significant part of the Volkswagen group can really find out if such a potential price increase needs to be applied to other brands in the family? These are Audi, Bugatti, Lamborghini, Seat, Skoda and the Ducati motorcycle manufacturer. Until now, Volkswagen has only said

"… We are watching the situation closely and looking at the full range of possible effects … We note with regret that there is currently a stay of the decision concerning the negotiated decision. [Brexit] treat. For us, this means a new period of insecurity and planning uncertainty. We continue to prepare for all eventualities … Regardless of this, the UK will remain an important market for the Volkswagen Group, the second largest in Europe. … "

However, Porsche said:

"… we need to clarify very quickly the future relations of the United Kingdom with the EU. …"

Tailor-made nature and attention to detail may mean that customers who have deposited deposits on a new Porsche car must wait an average of five months before delivery. Any customer who placed an order and paid a deposit on 17 January 2019 will not be affected by the change.

Can we expect similar moves from other European manufacturers where all cars are imported to the UK?

President of the Automobile Association (AA), Edmund King, said:

"… Import tariffs alone could drive up the list price of cars imported from the mainland of the United Kingdom by an average of £ 1,500 ($ 1,920) if the brands and their networks retailers were not able to absorb these additional costs. … "

Brexit turns out to be a bumpy road.

Stephen Pope ~ MarketMind