Seinfeld Could Lose Selling His Porsche

[Gooch1971]

Interesting article from Bloomberg News yesterday:

Seinfeld Could Lose Selling His Porsche
By Doron Levin

May 11 (Bloomberg) -- Balancing supply, demand and price can be as tricky for the makers of supercars like the $440,000 Porsche Carrera GT as for builders of luxury homes or designers of haute couture.

Porsche AG told dealers and enthusiasts back in 2003 that it intended to build "no more than 1,500" of the carbon-fiber bodied, 605-horsepower low-slung roadsters -- about the closest thing to a race car a licensed driver may legally operate on public roads. Comedian Jerry Seinfeld and fashion mogul Ralph Lauren were among those to open their checkbooks.

Others insist Porsche had hinted as early as 2002 that it might build only 700 or 750 Carrera GTs. The German automaker is said to have raised the target to 1,000 once it was in production, later to 1,250 -- before finally settling on 1,500.

The increase was critical to speculators, who buy scarce or exotic models built early in the production cycle and then resell them. Porsche demanded a $50,000 non-refundable deposit on orders for all Carrera GTs to discourage amateur speculation.

When a model remains in short supply, early buyers can resell at a premium, quickly clearing a return of 100% or more on their investment. Lately, though, sellers of Carrera GT may be taking a bath: Some with only a few hundred miles on the odometer are being offered at $350,000.

More Than Needed

"Quite honestly, Porsche didn't get it right," said David Mohlman, a Miami-based buyer and seller of vintage and exotic Porsches. "They made too many of a limited-production car."

Last weekend Porsche, which said it has sold 1,270 Carrera GTs worldwide, including 604 in the U.S., built the last of the model at its factory in Leipzig, Germany. Porsche won't say how many Carrera GTs it has built since production began three years ago.

"Traditionally we don't say until a couple of years after production is concluded," said Bob Carlson, a spokesman. Porsche still hails the Carrera GT as "the most successful supercar in history," though given the decline in price for some used models the market doesn't seem to agree.

Six years ago, Porsche and other automakers figured that the Internet boom, strong share prices and emerging economies like China's had created so much appetite for luxury brands that 30,000 to 40,000 buyers worldwide might be willing to spend from $150,000 to almost $700,000 for models like the Bentley Continental GT ($150,000)and Ferrari Enzo ($650,000).

VW's Entry

Even Volkswagen AG got into the act with its Bugatti Veyron, a supercar that can go 253 miles per hour (407 kilometers per hour) and costs 1 million euros, or about $1.2 million. VW says it plans to build 300 Veyrons.

The market forecasters proved optimistic, especially given the number of manufacturers jumping into the fray. Sales of DaimlerChrysler AG's Maybach ($350,000), introduced in 2003, was a notable new entry that struggled.

Instead of landing in the garages of sheikhs and bond traders, some Maybachs were sold at discount to hotels and resorts, which are using them as a high-class ride to the airport. The automaker said it has delivered 1,500, including 300 in 2005.

Maybach, the revival of a pre-World War II brand, underneath it all is a stretched, fancier version of DaimlerChrysler's Mercedes S Class for twice the money. The Maybach brand may mean something again; for the moment it just means dumb for anyone wealthy enough to buy it who understands a bit about automobiles.

Racing Background

The Porsche Carrera GT has its roots in Porsche's racing program, and uses a number of advanced materials that give it an exceptionally light weight, thus easily propelled by its V-10 engine. Its top speed has been clocked on a track at 208 mph, with a 0-to-62 mph time of 3.9 seconds.

The car does come with impracticalities for everyday use. The clutch takes some practice to avoid stalling in first gear and the exceptionally low ground clearance means speed bumps and steep driveways can cause underbody damage.

Assuming that Porsche built close to 1,500 Carrera GTs, the automaker has received about $600 million of revenue from the project. That tidy sum will help pay for the next new model, the four-door Panamera sports coupe. For the record, Porsche says it's planning to build about 20,000 Panameras annually.

Mohlman said he thinks Porsche might be quietly paying a rebate to Porsche dealers to help them discount any cars for which buyers forfeited their deposit. If so, dealers aren't saying, and Porsche denies it.

Only the passage of time -- and the automotive taste of future wealthy buyers -- will determine whether the car lives up to the investment potential of those who bought it for that reason.

Meantime, Ferrari's limited-edition Enzo supercar already is selling used for as much as $1.7 million, reinforcing Ferrari's reputation for adroitly keeping supply just shy of demand.

[kach22i]

Originally posted by Gooch1971
Meantime, Ferrari's limited-edition Enzo supercar already is selling used for as much as $1.7 million, reinforcing Ferrari's reputation for adroitly keeping supply just shy of demand.

So that's how they do it.

[Joeaksa]

Considering that he does not need the money, and that someone is crashing one ever month or three, they could get "rare" in a fairly quick time, and that would make the car hold its value.

[kach22i]

Originally posted by Joeaksa
Considering that he does not need the money, and that someone is crashing one ever month or three, they could get "rare" in a fairly quick time, and that would make the car hold its value.

Just like those 1976-77 turbo 911's (930).

When those early turbos spooled on in the middle of a turn I understand it could be quite the experience.

[Moses]

I can't believe they make a point about the GTs "sticky" clutch, then lavish praise on the Enzo. The GT is very driveable, much better than the Enzo. Unless you have proportions like a leprechaun, the Enzo is torture.

[legion]

1) I don't think Seinfeld will be selling his any time soon.

2) Don't the cars that are initially scoffed at by the "experts" usually end up being the real gems 20-30-40 or more years down the road?

[Z-man]

Seinfeld is a Porsche enthusiast, not a speculator/investor. The article clearly misses that - Seinfeld LOVES these cars, and he's one of the few that can enjoy the top level of P-cars.

-Z.

[MattKellett]

"Quite honestly, Porsche didn't get it right," said David Mohlman, a Miami-based buyer and seller of vintage and exotic Porsches. "They made too many of a limited-production car."

This cracks me up!, of course they got it right, they managed to sell all these cars. I'm fairly certain Porsche isn't in the used car business. I guess poor old David Mohlman has had trouble selling, with no doubt at large mark up, the same car that has been widely available at most dealerships.

Or maybe I'm wrong and missing something here.

Oh yes and Jerry isn't selling his car, nor is Ralph Lauren I suspect, but their names to help sell a worthless article.


Matt

[gaijindabe]

Originally posted by Moses
IUnless you have proportions like a leprechaun, the Enzo is torture.

I want one!

[legion]

Originally posted by MattKellett
Oh yes and Jerry isn't selling his car, nor is Ralph Lauren I suspect, but their names to help sell a worthless article.

Yep, this article had NOTHING to do with Jerry Seinfeld. Apparently, putting the word "Porsche" in the title wasn't enough.

[VaSteve]

Originally posted by MattKellett

Oh yes and Jerry isn't selling his car, nor is Ralph Lauren I suspect, but their names to help sell a worthless article.

Exactly.

[JeremyD]

With idiots with too much money and too little driving skill - that number will be pared down in pretty short order.

[techweenie]

Originally posted by MattKellett
Oh yes and Jerry isn't selling his car, nor is Ralph Lauren I suspect, but their names to help sell a worthless article.


Matt

+1

At Jerry's net worth, he could easily buy four Carrera GTs a year on the interest alone. This is just a cheesy way to broaden the appeal of a non-story. It's the kind of pap that gives journalism a bad name.

Having said that, Porsche should learn to stop making statements about how few cars it's going to make if they're just going to 'whore out.'

The first 930 was supposedly to be a run of 400 units. I think they did something similar with the later Speedsters and now, they've chased every last $100 million with Carrera GT production. Personally, I wish they'd make their non-sports car models the limited editions.

[tabs]

OOOHHHHH WHO CARES.....U've got to be a su(ka to buy into this kind of marketing ploy....its all designed to seperate U from yo money...Its kind of like buying a Commerative.

If U want to TRULY invest in an Auto...go out and by a 356 Speedster, 550 Spyder, 73 RS....then U have something thats allready been pared down in numbers and the return on Investment is allready pretty clear...

THE KEY TO COLLECTING SOMETHING...always buy something that was made to be used and there was no thought of how COLLECTABLE it might become...anything else is an ARIFICAL MARKET...subject to large DROPS in Price...

Now if you got the spare change and want a he11 of a ride go ahead and buy one of those GTs...but thats a whole differnt ball of wax then buying it for investment...

[Tervuren]

As someone who can't afford a new Porsche, I personly love how Porsche saturates the market, makes a used one something I can actualy buy.

[MattKellett]

Originally posted by Tervuren
As someone who can't afford a new Porsche, I personly love how Porsche saturates the market, makes a used one something I can actualy buy.

Too true, one day the GT3 will be mine, all mine!!!!!!!

Matt

[}{arlequin]

i wish they made a crapload of them too... then i could see/hear one on every corner and maybe even run across an instructor that has one

[Jeff Higgins]

Investors buy Ferraris. Drivers buy Porsches.

[RKC]

Remember a quote from the North American head of Ferrari that went something like "we always try to make one less car than the market demands."

I love everything about Porsches, and love many things about Ferraris, but as cool as this quote is on one level, it is also the same crass commercial idea behind Beanie Babies, et al.

Ferrari's are beautiful and fast but I sometimes worry about where they are headed - the cool "underdog/upstart" draw of Porsche (& Lamborghini) seems to make me feel good more consistently than the "I have no peer" feel of Ferrari. And it sure doesn't help that most Porsches are now prettier than most Ferraris....

[glenncal1]

Speculation is just that, sometimes you speculate right and sometimes wrong. It is not Porsche's job to help the speculator, it is Porsche's job to help the shareholder (stock which has just about tripled in the last 5 or six years). As a stockholder the speculators can kiss my SC's tailpipe. )