Macan Order - customs duty

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Ray G
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Post by Ray G »

GMAN75 wrote: Mon Jan 21, 2019 3:01 pm
andreas wrote: Mon Jan 21, 2019 2:52 pm As I've posted in another thread, any WTO tariff would only be payable on the value at which Porsche AG sell the car to Porsche GB - this will be much less than the retail price, so a 10% tariff shouldn't result in a 10% increase in the retail price. If it does, it's because Porsche GB or the OPC is profiteering on the back of Brexit.
Huh? What difference does that make? The tariffed vehicle will be more expensive to Porsche GB. If it bought it pre tariff at 100 and post at 110 and sold it to the customer at 150, it would still want the 50 as margin. Therefore, if Porsche GB wish to retain their margin, the customer will eat the tariff not Porsche. There's no profiteering...the end customer always eats the tariff. It's just then a question of demand.
Wasn't the point that the WTO tariff will be on the car and not the mark-up. For example if it is currently (say) £50k for the car plus (say) £5k mark-up = £55k, then a hard Brexit "should" change the prices to £55k (up 10%) plus £5k (no change on mark-up) = £60k...a 9% increase on the road?
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andreas
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Post by andreas »

GMAN75 wrote: Mon Jan 21, 2019 3:01 pm
andreas wrote: Mon Jan 21, 2019 2:52 pm As I've posted in another thread, any WTO tariff would only be payable on the value at which Porsche AG sell the car to Porsche GB - this will be much less than the retail price, so a 10% tariff shouldn't result in a 10% increase in the retail price. If it does, it's because Porsche GB or the OPC is profiteering on the back of Brexit.
Huh? What difference does that make? The tariffed vehicle will be more expensive to Porsche GB. If it bought it pre tariff at 100 and post at 110 and sold it to the customer at 150, it would still want the 50 as margin. Therefore, if Porsche GB wish to retain their margin, the customer will eat the tariff not Porsche. There's no profiteering...the end customer always eats the tariff. It's just then a question of demand.
Perhaps you need to think this through a bit more. Let's say Porsche AG sells a Macan to Porsche GB for £35, and the eventual retail price is £60K. If a 10% WTO tariff is applied, the price as it comes in rises to £38.5K. With the same amount of profit for Porsche GB and for the OPC, this would increase the retail price to £64.2K (ie add the £3.5K tariff plus 20% VAT). That's a 7% rise in the retail price, not a 10% rise.
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Ray G
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Post by Ray G »

👍 +1
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Guy
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Post by Guy »

^ For clarity, is your margin of '50' a percentage?

Otherwise, in your example Porsche GB can retain a 'margin' of 50 by simply increasing the retail price by 6.66% from 150 to 160. Hence Andreas' point remains valid.

(EDIT: Too slow!)
Last edited by Guy on Mon Jan 21, 2019 3:27 pm, edited 1 time in total.
happy days
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Post by happy days »

Unless they operate on a cost plus basis, then it's all percentages. If they are to remain the same, the final cost will be 10% up as the base cost landed at the dealership will be 10% higher.
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GMAN75
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Post by GMAN75 »

andreas wrote: Mon Jan 21, 2019 3:19 pm
GMAN75 wrote: Mon Jan 21, 2019 3:01 pm
andreas wrote: Mon Jan 21, 2019 2:52 pm As I've posted in another thread, any WTO tariff would only be payable on the value at which Porsche AG sell the car to Porsche GB - this will be much less than the retail price, so a 10% tariff shouldn't result in a 10% increase in the retail price. If it does, it's because Porsche GB or the OPC is profiteering on the back of Brexit.
Huh? What difference does that make? The tariffed vehicle will be more expensive to Porsche GB. If it bought it pre tariff at 100 and post at 110 and sold it to the customer at 150, it would still want the 50 as margin. Therefore, if Porsche GB wish to retain their margin, the customer will eat the tariff not Porsche. There's no profiteering...the end customer always eats the tariff. It's just then a question of demand.
Perhaps you need to think this through a bit more. Let's say Porsche AG sells a Macan to Porsche GB for £35, and the eventual retail price is £60K. If a 10% WTO tariff is applied, the price as it comes in rises to £38.5K. With the same amount of profit for Porsche GB and for the OPC, this would increase the retail price to £64.2K (ie add the £3.5K tariff plus 20% VAT). That's a 7% rise in the retail price, not a 10% rise.
Those metrics don't work where Porsche wishes to retain its MARGIN %. That metric is key here. Not the overall profit.
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andreas
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Post by andreas »

GMAN75 wrote: Mon Jan 21, 2019 3:32 pm

Those metrics don't work where Porsche wishes to retain its MARGIN %. That metric is key here. Not the overall profit.
Well, if Porsche GB and the OPC want to keep the same percentage margin by charging extra profit on the tariff amount, I guess they will. But it's rather underhand telling people that the retail price will rise 10% because of a 10% tariff.
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Guy
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Post by Guy »

I guess that the base cost could also go up also because of WTO tariffs on all the Porsche car-parts imported from UK to Germany! A double whammy!
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Post by GMAN75 »

andreas wrote: Mon Jan 21, 2019 3:40 pm
GMAN75 wrote: Mon Jan 21, 2019 3:32 pm

Those metrics don't work where Porsche wishes to retain its MARGIN %. That metric is key here. Not the overall profit.
Well, if Porsche GB and the OPC want to keep the same percentage margin by charging extra profit on the tariff amount, I guess they will. But it's rather underhand telling people that the retail price will rise 10% because of a 10% tariff.
You mean the same way the government refunds tourists their "VAT" at the airport?! :lol:

This is all about margins. These companies are measured on margins and even have their transfer pricing established upon such. It will end up, hopefully, that some of the cost is borne by the entities involved but the majority will be passed on. All this country will see is price driven inflation underpinned by nothing more than Brexit stupidity. Frankly, it's the biggest own goal for generations. If anyone wants a 2018 S, Volcano Grey, msg me...£80k! :lol: :lol:
happy days
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Post by happy days »

Guy wrote: Mon Jan 21, 2019 3:43 pm I guess that the base cost could also go up also because of WTO tariffs on all the Porsche car-parts imported from UK to Germany! A double whammy!
Yup. Welcome to non-agreement Brexit. Watch food prices rocket if no deal is reached.
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