• Sep 8, 2006
Porsche CEO Peter Schwarzenbauer is about to open up his special brand of wup ass over the heavy incentive spending of the Big 2 and the Chrysler Group. He says the U.S. auto industry is "trapped in a death spiral" because of its dependence on incentives, and blames large automakers like General Motors, Ford and the Chrysler Group for not being able to better forecast the market and the manage supply and demand of their inventories. Large remaining inventories of last year's models are usually what spark incentive spending, as older vehicles need to be sold to make room for new ones. In the past few years at least, the Big 2 and Chrysler have overestimated demand for their vehicles and turned to crafty incentive deals to clear their lots.
Porsche, however, has a no-incentives policy, which it can maintain since it sells a much smaller number of vehicles. Schwarzenbauer admits his company's size is an advantage, but still won't let the rest of the industry off the hook. He forecasts that the entire industry will be damaged by heaving incentive spending eventually, but doesn't go into exactly how.

Edmunds reports that incentives spending actually went down last month by 15% compared to July. Porsche shows up as spending the second lowest amount on incentives per vehicle, around $538, since Edmunds records all types of incentives. Scion spends the least at $74, and you could almost buy a second car with the amount that Jaguar, the biggest incentives spender, shells out per vehicle: $8,447.

[Source: Ward's Auto]


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  • 20 Comments
      • 8 Years Ago
      The choice the domestic automakers currently have is to:
      1) Sell cars with huge incentives, and take a ass whoopin' when it comes to profits.

      2) Pay people to not make those extra cars, and take an even bigger finacial ass whoopin', but increase each individual transaction price. (It may take $5,000 in incentives to move the car, but they would have to pay labor costs of $10,000 if they built the car or not.)

      Hopefully now with the buyouts, GM and Ford can bring production in line with demand.
      • 8 Years Ago
      This is from a company that dropped the 2007 Cayenne for weak sales? And the current model's "Titanium Edition" at a reduced price.

      http://www.autoblog.com/2006/08/21/porsche-cayenne-dropped-for-2007/

      Sounds like the pot calling the kettle black.
      • 8 Years Ago
      DMan,
      BRAIN DEAD is thinking that anyone on this blog or the internet really cares about your opinion. Your time could have been better spent picking your nose or something.

      • 8 Years Ago
      We'll see how he feels in February when Porsche is forced to have a Cayenne-A-Thon to get rid of all those 2006 Cayennes that are leittered all over the dealer lots.
      • 8 Years Ago
      What the man says has some truth.

      However,

      He should be busy building a Porsche SUV?! hehe.

      PLUS when you think about it, how long did it take Porsche to jump on the SUV craze, until it was already over?

      Look they are just better at different things:

      Americans use incentives, always have always will
      Porsche, well they won't ever

      Cadillac had NEVER had an SUV, then they introduced the Escalade WAAAY back in 1999.

      Porsche, well it took them YEARS to get their SUV and many would argue it was too late for really really big sales that Cadillac enjoyed.

      Just two people good at two (2) different things and one currently has the ball in their court, no big deal.
      • 8 Years Ago
      He speaks the truth to a certain extent, but the fact is that you can't really compare buyers of a Ford Focus, and buyers of a Porsche 911. The buyers of the 911 don't need incentives to walk into the showroom because they already know what they're buying and have the money to back it up.
      • 8 Years Ago
      He speaks the truth.
      Why are the big 3 still awash in red ink? Any guesses?
      Because they are BRAIN DEAD!! They cannot plan. They cannot predict. The only thing they can do is produce, produce, produce. When they have WAY TO MANY cars, which is almost always these days, they jump on the incentive wagon. Then, they jump off. Then they jump on. Sounds like an addict to me.
      And almost all the poster here are too busy making snide 6th grade remarks to admit that the American automobile industry in DYING!! They used to be the leaders. The used to be the cutting edge. Now they are just pitiful. As are most of the posters here.
      • 8 Years Ago
      It's hard to respect any complaints coming from Porsche, especially after they released a SUV.
      • 8 Years Ago
      Gorgeous doesn't care if the incentives are big. Gorgeous was born that way. Gorgeous! Gorgeous!
      • 8 Years Ago
      #6 - I truly have better things to do than screwing with the car salesmen. However, they've had sex with me so often (screwing me) that it feel good once in a while to be the "screwer" rather than the "screwee."

      This selling system is dead. Nothing more than the Dealer-owner screwing his employee and tell'em to screw the public.
      • 8 Years Ago
      It will be interesting to observe occuring events around of this affair.
      • 8 Years Ago
      Price the product right -- don't impute a high MSRP!!!

      As I said before -- the Retail Automobile Franchise System is Dead and the industry doesn't want to recongize the fact.

      The Automobile Dealships as design is out-dated. I drive into dealerships and drive right backout JUST TO GIVE THE SALEMEN A "WOODY."

      Its time for the Manfucture's to License various Retail Locations to Service the vehicles. (new longer warranties)

      You've heard of "Just-in-Time inventory; well; the Manufactures are giving the Dealerships "Just-in-Case" inventory. Therefore, you have overstock and incentive.
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