When Porsche dealerships go on sale, there are generally “ten buyers willing to overpay,” and these luxury dealerships are meeting dealers’ expectations.
Find out more about a new avenue of luxury some dealers have discovered.
When a cluster of Minneapolis luxury-car dealerships went up for sale last year, one brand was prized above the Mercedes-Benz and Audi stores.
“Porsche was the cherry on the cake,” Jay Hulbert, the president of the dealership group that acquired the outlets, said in a telephone interview. “The volume is so dramatically different, yet when you dig into the financial performance, Porsche meets your expectations and then some.”
AutoNation Inc, Penske Automotive Group and Asbury Automotive Group Inc, three of the largest new-car retailers in the U.S., all have purchased Porsche franchises since 2010. In a period of sparse activity for auto-dealership acquisitions, the deals vaulted Porsche among the most frequently acquired franchises by publicly traded groups during that span.
“If a dealer wanted to sell, I have 10 buyers willing to overpay” for a Porsche franchise, said Bob Morris, a director at auto-dealership brokerage Tim Lamb Group LLC.
While some Porsche aficionados chafe at the lineup’s expansion, seeing SUVs and four-door sedans as a violation of the brand’s principles, the value and profitability of the Porsche franchise has changed more dramatically than for any brand in the industry in the last 20 years, said Alan Haig, managing director for Presidio Automotive, which advises dealers who are looking to sell their stores.
“There aren’t that many sports-car buyers in the world,” said Haig, who previously oversaw acquisitions at AutoNation, the largest U.S. auto-dealer group. “Many Porsche stores were bought almost as a toy for the dealer, for him to have something nice to drive and to go on nice trips. But it wasn’t a serious money-making investment.”
That changed when the brand introduced the Cayenne SUV, which debuted in the U.S. market in 2003. Porsche transformed from drawing wealthy males to attracting well-off families who could justify paying $60,000 for an SUV that drove more like a sports car than a truck.