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Certified used Porsches arrive

By Diana T. Kurylko

Automotive News / June 16, 2003

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With sales of its bread-and-butter sports cars down sharply, Porsche Cars North America is giving its dealers the top item on their wish list - a certified used-vehicle program.

Porsche is the last luxury brand to launch a certified program, which dealers consider essential for protecting residual values and attracting buyers. Last year, 1.28 million certified used vehicles were sold in the United States, up 87 percent over 2001, according to the Automotive News Data Center and Autodata Corp.

Details of the program, which started this month, were disclosed by dealers. Porsche headquarters in Atlanta refused to comment.

Under the program, a 4- to-8-year-old car no longer under original warranty would be certified for another two years and up to 100,000 miles. Vehicles still under the new-car warranty are guaranteed up to six years, or 100,000 miles.

Porsche's warranty on new cars is 4 years/50,000 miles.

The cost to dealers ranges from $1,495 for a Boxster, Porsche's cheapest sports car, to $1,595 for the Cayenne SUV.

Dealers are delighted with the program. "We've been begging Porsche for years to get into this business," says Gary Ackerman, owner of Gaudin Jaguar-Porsche-Aston Martin in Las Vegas. "It is extremely important for resale value and for long-term residuals on our vehicles."

Heading off other dealers

Chris Pfaff, owner of H.J. Pfaff Motors Inc. in Woodbridge, Ontario, and a member of Porsche's dealer board of regents, says the certified program helps protect the franchise by heading off non-Porsche dealers who sell used Porsches.

"There are a lot of independent used-car dealers that want to be used Porsche dealers. This will make it harder for them," he says.

Other luxury makers have been extremely successful luring first-time buyers to their brands via the certified program.

BMW is the certified luxury leader. Through May, its certified sales are up 17 percent from a year earlier to 28,123.

Porsche's car sales have slowed in recent months because of a combination of factors that include severe winter, economic uncertainty and the war with Iraq, a company spokesman said last week. Car sales through May are off 26 percent from the same period a year earlier, although the franchise is up overall because of the new Cayenne SUV.

"Porsche is the ultimate deferrable purchase," he said.

Inventory is high

The slowdown has saddled dealers with an unusually high inventory of unsold vehicles.

Porsche reported a 91-day supply of Boxsters on hand on June 1, up from 87 a month earlier, and an 88-day supply of Carreras, down from 100. Overall, it had a 77-day supply of cars on hand on June 1, up three days from a month earlier, according to the Automotive News Data Center.

The Porsche spokesman said production of the Boxster and 911 has been cut and company stocks will fall in the coming months. Unlike other luxury makers, Porsche offers no incentives or rebates on its models.

On the other hand, Porsche is trying to increase its stockpile of Cayenne SUVs, the spokesman said. Stocks of the new truck increased to 2,500 units or 49 days on June 1 from 31 days a month earlier.

"With Cayenne, we knew we had to stock more than we would with the sports cars because it's a different customer," he said.

"The Cayenne customer won't wait three months for delivery, like a 911 buyer will. By and large, those customers want to be able to choose from inventory you have on hand."