Is Porsche creating or incentivizing digital retailing standards for its dealers?
They will certainly try to make sure that people are embracing it. And the only way you could do that is to measure it. We’ll work on that.
I don’t think it’ll be like a facility or CSI component. It’s too arbitrary. Porsche’s also smart enough to know that when things back up a little bit, when the market changes, we get hit in a recession more than other people. We’ve all been through enough cycles to not go crazy demanding that some 32 percent has to be digital. That won’t happen.
Do you anticipate Porsche mandating any digital capacity?
We see most of our OEMs doing that. But it’s pretty hard to measure. They want to see that it’s in good faith, that you’ve got an aggressive tool, you’ve got people that understand it and can talk it.
So I don’t think it’s going to be heavy-handed mandates, anything like that.
Is Porsche providing digital retail training?
Absolutely. They’re going to have it in their training programs. And that’s the natural place to do it.
They’re not doing so now?
They will. As they develop it this year, it’ll absolutely come out into the best ways to [use] it. Absolutely, they’ll have training on it for sure.
Do dealers feel Porsche has prepared them to sell electric vehicles?
Yes. We sold a good number last year. We think we’re going to sell a bigger number this year, and we’re going to continue to launch models that are BEV. It’s coming. I don’t think that’s a big secret. For a gas-powered sports car company to be leading that charge, I think is huge.
Are dealerships finding EV investment worth it? Is Porsche helping offset the cost?
Porsche helped a little bit, and the technology is evolving. It works better and better every year. Porsche had big demands and backed it up with sold-out product. And it was a real dollar. It wasn’t small. But if 13 percent [of Porsche sales were EVs in 2021]and 18, 19 percent [in 2022]? Kind of hard to argue.
So it certainly hasn’t been a fight, let me put it that way. We haven’t had too many fights. We don’t just sit and hold hands, but it’s a pretty collaborative working relationship.
Where are you on inventory?
The cars are basically sold before they get here. Really everything is pretty much pre-sold. But that’s OK. We get 100 cars in and deliver 100 cars.
We’re too light, we’re too short, but it’s OK. We can still demo a car. We’re just taking orders, and people are waiting for a little bit. This clientele can do that, and it’s fine.
I grew up in the restaurant business. We always had 10 percent [left open] for walk-ins, right? So we always have some cars available. It’s not a ghost town. But it is predominantly order-based.
What are you hearing regarding supply for 2022?
Same. It’s like this for ’22. They’re starting to talk about maybe ’23 [to rebuild].
What do you expect for 2023?
Across the board, my manufacturers are all saying day supply — inventory on ground — is going to come back really, really slowly. It’ll be interesting to see how much everybody fights to bring it back to where it was.
I think everybody’s learned from this experiment. A little shortage holds margin for us. A little shortage holds margin for the OEM. A little shortage makes your trade-in worth money. A little bit short can be good for everyone.
What would you prefer as an inventory level?
It’s a little light today. Probably, if you had to make up a number, it’s probably 30 days’ supply on ground.
For the industry. You know, everybody can drive it, see it, touch it, and their car will be in in one, two or three months. That’s fine. And we all order enough cars that when a guy gets in a wreck or something, you can fix it.
Was the past year more profitable for Porsche dealerships?
It was a very good year for everybody. It was a very good year for the industry. Most of my manufacturers had great years. Most of my dealer friends had great years.
Will Porsche dealers’ profit levels be sustainable as inventory rises?
There’ll be another change by then. But I think if you stay one step ahead of the curve, if you look, and you’re communicative, it shouldn’t be that hard for Porsche. We sell 70,000 cars, 60,000, whatever it is. We’re a small manufacturer. It’s a very controlled environment.
Really, if you think about it, Porsche has this controlled limited market. [It’s] dangerous when there’s a big hitch [like a recession]. Other than that, Porsche could be in the driver’s seat for several years.
Has Porsche given dealer guidance on increasing diversity?
No, I think that’s up to us. And then that really becomes up to your location. I think that becomes highly subjective. In LA, it’s a melting pot. My employees are a melting pot. I love that.
Have you seen diminished leasing volume?
Yes. It lost numbers. And we’re very much aware of it. We need to stay on top of it. You’re feeding the market for the future, right?
Does Porsche plan to improve leasing this year?
They’ll be careful to have a lease component. They know they need to do that.
Has Porsche imposed data protection and security requirements?
Most of [the automakers] actually rely on us to do it rather than give us specific guidelines.
Are Porsche dealers selling above sticker price or adding aftermarket products on new vehicles?
All the manufacturers have to be very careful about MSRP. It’s suggested. For all of history, no one complained about it being under. Porsche is appropriately concerned.
And we’ve addressed it. And where we’re starting is just on the egregious stuff. I’ll give you an example. If you made a deal in June of last year, and it takes eight or nine months to get here for some reason, and the market has changed dramatically, you smile, go out and shake the guy’s hand and [honor the deal]. We all hear stories about where people don’t do that.
So Porsche is going to start with the low-hanging fruit, and counseling us: “Come on, let’s just get agreement that a deal is a deal. You shook the guy’s hand — that’s a deal.”
After that, I’m sure they’ll edge it up and see how far they can get into the conversation before they have to back out.
We had a guy come in last week, and he wanted $40,000 more than he paid for a car, and we bought it. And then, it was only fair that he didn’t get to buy the next one for MSRP. He had no argument.
The interesting part for me is that we don’t have more disgruntled people today than a year ago.
Are you selling vehicles over sticker price?
On the special cars, yes. A 911, absolutely. A Paint to Sample [program car], absolutely. Macan based? No.
Are you adding products to the vehicles?
Absolutely. We’re adding minor things, and the cars are coming a bit more loaded. It makes the car unique. A unique car is worth 15, 18, 20 percent more.
Our Porsche [customer] is pretty damn educated. He or she is in the business world somehow. I actually think that helps in this situation. They’re making money and kind of understanding the market.