Porsche Profits Climbing Amid Strategy Changes

German luxury automaker Porsche is reporting stronger profit margins even as it ramps up production and makes less expensive vehicles.

(Photo courtesy of Porsche)
(Photo courtesy of Porsche)

German luxury automaker Porsche is reporting stronger profit margins even as it ramps up production and makes less expensive vehicles.

Bloomberg reported that the company, part of Volkswagen Group, increased its annual output by 47 percent over past three years and that the increase could largely be attributed to the Macan SUV, which debuted in 2014 and now accounts for 40 percent of its sales.

The Macan's starting price of $47,500 makes it Porsche's most affordable vehicle, but profits were nonetheless up by 15 percent last year. They are on pace to climb another 9 percent this year to more than $17,000 per car — more than triple the profits of German luxury rivals Daimler and BMW.

Porsche's sales remain just a fraction of those larger companies, but executives said that their focus on the customer experience also helped lift profits.

The Macan, for example, generally doesn't stay below $50,000 once buyers begin adding expensive options to their SUV. Bloomberg noted that, on average, Porsche vehicles still command nearly $100,000 in revenue each.

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