A Wise Man Can Hear Profit in the Wind

It feels like it’s been a busy two weeks, with the New York Auto Show followed up by the Auto Shanghai show. But this week starts ACT Expo, which almost always has something newsworthy come out of it. But in the meantime, let’s talk about what else is going on.

In This Issue

• A Porsche a Day…

• Successful Business Strategy

A Porsche a Day…

I was talking to a contact at Porsche yesterday, and I joked that I’m going to do a week of Porsche content. Well, here it is. Through Monday of next week, I’m going to have at least one Porsche story a day, either here or at Destination Charged. So here is the first topic.

When talking about tariffs, a lot of time and energy has been spent on the effects of the everyday consumer. How much more expensive are the affordable-ish cars going to be when an additional 25% tariff is added to them? Less time has been spent on some of the higher-end brands. But I think there’s something here worth thinking about.

I think we can all agree that a Porsche buyer is less price-sensitive than a Nissan buyer, but with the average price of a new vehicle being around $50,000, the price of a new Porsche isn’t all that much higher than that. Heck, I shared with you that a Ford F-150 XLT, at $67,000, was called an “everyman’s truck.” The 718 starts at approximately $5,000 more than that.

I’m not going to say Porsches are cheap, because I think the idea of a $70,000 truck as being “everyman” is ridiculous, but the tariff situation does present a situation that completely upends the Porsche enthusiast community.

A new Porsche 911, pre-delivery and tariffs, and stuff, starts at $127,700. While that’s a bump over the previous 911 (which, admittedly, doesn’t look all that different), it’s obtainable for some people.

If that car is hit with a 25% tariff, and Porsche passes that on to the consumer, the starting price would essentially be $159,625. That’s $25 more expensive than the more desirable 911 Carrera S Cabriolet (pre-tariff).

I’m willing to bet dollars to donuts that a 911 Carrera buyer is price sensitive enough that they wouldn’t pay that tariff, plus the options they want, to get the car. Some will, but some won’t.

A more realistic example is the Porsche Macan. It starts at $63,100 with the above caveats, and with a 25% price increase, that would be $78,875. That’s a big jump, and I’m sorry, but someone looking at a $63k car can’t just swing a $79k car.

So that’s bad.

But one thing I’ll give credit to Porsche for is how much they care about heritage and used owners. Porsche is a company that creates new hardware for vehicles long after they are no longer available to buy, so customers can upgrade to the latest tech. Porsche is investing big money in synthetic fuels so old Porsche owners can still drive their cars, even with stricter emissions requirements.

The point is, the Porsche community is valued by Porsche, and the Porsche community is a thriving place. But how do people join the community if they can’t afford a fancy new model?

They buy a pre-loved model. But if people aren’t buying new cars, because tariffs are pricing them out of what they want, then those new cars don’t become used cars, and then there’s a problem.

That’s all before you even begin talking about parts suppliers and small businesses who support the community that are facing tariffs that could put them out of business.

Successful Business Strategy

One of the things I want to bring to my newsletter is what I think would be a successful business strategy for those who read it — and are in a position to take advantage of it. It’s easy to bitch about a problem but not offer any solutions.

As the 22nd Ferengi Rule of Acquisition clearly states, “A wise man can hear profit in the wind.” And automakers, if one of you does what I’m suggesting, your coffers will be lined with gold.

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