MP4 12C Deprecation and Brand Value
Discussion
APOLO1 said:
Guyer...respectfully your posts follow no logic, along with a lack of cogency. May I refer you back to the OP, we are not debating 10 year old Porsches.........lol
Cherry picking low hanging fruits' with the odd car over the past 10 years has no purpose on this topic. That being as to why offer a substantive discount on new or slightly used 12Cs, when IMHO the more suitable use of funds would be to realign the recommended retail price in line with that of the market.
Good Luck.
The answer lies in brand integrity for new sales.Cherry picking low hanging fruits' with the odd car over the past 10 years has no purpose on this topic. That being as to why offer a substantive discount on new or slightly used 12Cs, when IMHO the more suitable use of funds would be to realign the recommended retail price in line with that of the market.
Good Luck.
So, just to summarise.
1. Ferrari priced the 458 way beyond what McClaren expected
2. McClaren wanted the Mp4 to seen to be a direct competitor with the 458 and so matched the pricing pound for pound
3. Enthusiasts could not afford the entry fee and so, initial sales fall to rich people (and to a lesser extent, rich enthusiasts)
4. Rich people want expensive cars and the illusion of exclusivity so the McClaren Sales and marketing department decided to keep parity with Ferraris lead on pricing
5. McClaren does not have the brand presence with said rich people and so sales are limited and depreciation reflects what enthusiasts and not rich people want to pay
6. Prices fall like a magnet to the £100k range and into the hands of the enthusiast.
McClaren will not capitulate and instead build the £100k car as reported in order to prop up the financial investment made in the mp4 eventhough they could price the mp4 as it should have been originally - at F430 levels.
In the medium to long-term Macca will sell more units and maintain their brand integrity, in the short term, the people buying the mp4 from new get shafted.
It's pretty basic stuff this, isn't it? McLaren have spent a lifetime competing with Ferrari. Why on earth would they make a 'correction' to their market price in the home market? That is commercial suicide and they should not do it.
There are much better ways of managing market pressures and both they and Ferrari are doing it. McLaren are introducing a newer and cheaper model to cater for the 911 price range, utilising costs already sunk in MP4 development and also production capacity, allowing them to scale MP4 volumes to market needs. They will then add a 'Scuderia' version no doubt, probably of both coupe and spider and manage things from there. Ferrari introduced the California to try and widen their market appeal. The issue for all manufacturers is production volume. Allowing volumes to fall screws the business model and cannot be accommodated in short time. It can be a terminal issue. Reducing retail price is a short term fix and a long term catastrophe because it acknowledges the brand does not sit alongside a competitor such as Ferrari. Better to do that quietly with careful discounting (for a short term period only) rather than publicly with a retail adjustment. It is still painful but the best option in the short term.
Aston do this and are working hard to arrange things so they don't have to. Ultimately retail discounts do not mean less holding cost because depreciation is not avoided. All that happens is more people can access the brand because the price is more 'affordable' in the first place. If you get discounts up front you have to give them back again at the back end (sorry but this is irrefutable logic and anyone who thinks otherwise is kidding themselves, with very few exceptions). Sometimes you can find a dealer with an odd car, say a cancelled order, that might give good value but when it is happening right across the network, be prepared.
Launching a new brand is always the hardest thing in terms of residuals - dealers, customers and market commentators like CAP have no idea what will happen. They are somewhat unsure of production and very unsure of what demand will be like. If you can get over that initial hurdle it gets easier to manage.
McLaren should be doing a whole lot of learning in this period and frankly, have not done too badly from what I can gauge. I would suspect the biggest thing affecting them is that dealers will need big margins across every used car because they are unsure of how long they will be keeping them. The MP4 used market is as new and immature as the new market was 3 years ago. This obviously means that those who change frequently or early will pay high and those who hang on for a few years should do ok because it will settle down.
As the brand grows, early MP4s may even harden in price because there is much less supply compared with Ferrari. I would imagine a carbon bodied, high tech, high power, F1 inspired, turbo car will do well in the 5-10 year old range because by then all Ferraris will be turbocharged. I believe they cannot meet Euro VI emissions with these current high compression ratios and will resort to turbos to get the required power.
I am very familiar with new car brand launches across western and eastern Europe. I don't think anyone has tried to launch a supercar brand in direct competition with a serious and established competitor from scratch in the modern era. Bugatti, Bentley and Rolls were relaunched by existing large manufacturers, Noble is not trying to be a mainstream supercar player.
I think they're doing alright and I would not be put off buying one because of the depreciation. Whether I prefer the experience to Ferrari is another matter. I might though, especially if future Ferraris are indeed turbocharged.
There are much better ways of managing market pressures and both they and Ferrari are doing it. McLaren are introducing a newer and cheaper model to cater for the 911 price range, utilising costs already sunk in MP4 development and also production capacity, allowing them to scale MP4 volumes to market needs. They will then add a 'Scuderia' version no doubt, probably of both coupe and spider and manage things from there. Ferrari introduced the California to try and widen their market appeal. The issue for all manufacturers is production volume. Allowing volumes to fall screws the business model and cannot be accommodated in short time. It can be a terminal issue. Reducing retail price is a short term fix and a long term catastrophe because it acknowledges the brand does not sit alongside a competitor such as Ferrari. Better to do that quietly with careful discounting (for a short term period only) rather than publicly with a retail adjustment. It is still painful but the best option in the short term.
Aston do this and are working hard to arrange things so they don't have to. Ultimately retail discounts do not mean less holding cost because depreciation is not avoided. All that happens is more people can access the brand because the price is more 'affordable' in the first place. If you get discounts up front you have to give them back again at the back end (sorry but this is irrefutable logic and anyone who thinks otherwise is kidding themselves, with very few exceptions). Sometimes you can find a dealer with an odd car, say a cancelled order, that might give good value but when it is happening right across the network, be prepared.
Launching a new brand is always the hardest thing in terms of residuals - dealers, customers and market commentators like CAP have no idea what will happen. They are somewhat unsure of production and very unsure of what demand will be like. If you can get over that initial hurdle it gets easier to manage.
McLaren should be doing a whole lot of learning in this period and frankly, have not done too badly from what I can gauge. I would suspect the biggest thing affecting them is that dealers will need big margins across every used car because they are unsure of how long they will be keeping them. The MP4 used market is as new and immature as the new market was 3 years ago. This obviously means that those who change frequently or early will pay high and those who hang on for a few years should do ok because it will settle down.
As the brand grows, early MP4s may even harden in price because there is much less supply compared with Ferrari. I would imagine a carbon bodied, high tech, high power, F1 inspired, turbo car will do well in the 5-10 year old range because by then all Ferraris will be turbocharged. I believe they cannot meet Euro VI emissions with these current high compression ratios and will resort to turbos to get the required power.
I am very familiar with new car brand launches across western and eastern Europe. I don't think anyone has tried to launch a supercar brand in direct competition with a serious and established competitor from scratch in the modern era. Bugatti, Bentley and Rolls were relaunched by existing large manufacturers, Noble is not trying to be a mainstream supercar player.
I think they're doing alright and I would not be put off buying one because of the depreciation. Whether I prefer the experience to Ferrari is another matter. I might though, especially if future Ferraris are indeed turbocharged.
I think the brand has suffered along with the resale values for two main reasons. First McLaren rushed the car into production before it was ready, one suspects because of the introduction of its key rival the 458. The result was dissatisfied customers, bad press followed and stinging depreciation. Secondly the dealer network is new and also very small. There is no brand experience to fall back on, consequently the network/factory has been unable to react properly to the problems and has been unable to control the second hand values as well as they originally expected.
Why do so many get butt hurt when hearing of Mclaren and it's demise!?....
It was only a matter of time unfortunately, I predict in 5 years, mclaren will be owned by a German brand, with every single component being imported to Woking to be assembled, and sold as a British brand....
Wait, I've heard of such a thing happening in the past!, just can't remember at this time the names of these companies...
Anyway, on the plus side, I'll be buying a 1 year old Mclaren p1 instead of a brand new VW Golf GTI in afew years time at the time price!...
GOOD TIME!.
It was only a matter of time unfortunately, I predict in 5 years, mclaren will be owned by a German brand, with every single component being imported to Woking to be assembled, and sold as a British brand....
Wait, I've heard of such a thing happening in the past!, just can't remember at this time the names of these companies...
Anyway, on the plus side, I'll be buying a 1 year old Mclaren p1 instead of a brand new VW Golf GTI in afew years time at the time price!...
GOOD TIME!.
APOLO1 said:
It is also within my direct knowledge that in part the examples your give are perverse. Back in the UK my 991 S cost 86k new, ok with discount done 6k miles, part ex price agst , 991 tts 79k, perfectly reasonable.
APOLO1 said:
nothing could be further from the truth. In my view the 12C is the best performance car to hit the market in the past 10 years. I am about to buy my 3rd
Your posts come across as another message, if that is the case! I, too, believe that the 12C is sublime (only extensively experienced through the passenger seat) and would love to own one at some point.APOLO1 said:
CC8 above, has the best way forward, as in stick to a Fantasy Garage.....lolllllll
That will be many years away and I hope they drop significantly by then (for purely selfish reasons)!KFC said:
Is your friend mentally handicapped? How was the above ever going to happen? 
Haha 
I don't think he's handicapped, although prob not the sharpest tool in the box it has to be said.Don't exactly know his reasoning, probably some man-maths came into the equation, but I think at the time when he purchased it there was still this illusion of more people trying to buy them than cars that were physically available, and/or even, rumours of people paying over list just to get in one. So with his 'good deal', even 6 months later hopefully he might get what he paid for it.
Can someone please put numbers to all this talk?? What can you get a new decent spec coupe for? Let's say a £170k car with options up to £220k. What can you get a new one for? Also, if that is walking out the showroom at at £190k then what can you get a 1 year old one for?
With regards to the spider, what did you sell yours for Apolo? Where are the bids for a decent spec 2012 car? Are the dealers only 140k bid??
Thermonuclear what is your friend being bid for his 1 year old car by dealers? What was the list price and what was his discounted price?
Any actual numbers here would be very useful, also if anyone knows what the lowest bids for spiders are now please I'd love to know. Is the £120k spider at the end of the year a distinct possibility?
With regards to the spider, what did you sell yours for Apolo? Where are the bids for a decent spec 2012 car? Are the dealers only 140k bid??
Thermonuclear what is your friend being bid for his 1 year old car by dealers? What was the list price and what was his discounted price?
Any actual numbers here would be very useful, also if anyone knows what the lowest bids for spiders are now please I'd love to know. Is the £120k spider at the end of the year a distinct possibility?
Like many others I'm sure I'd like to see some real numbers put to these hypothetical p/x figures.
I'm in the market for one of these or a 458 and have been scrutinising the market closely for six months.
And to be honest, it looks to me like both are suffering similar depreciation over a year from new.
Anyone looking for a one year old 458 with a ton of options can easily find a car that was £210k+ new down in the £160k-170k range. Is that any bette or worse than what we are talking about for mp4?
Now I'm not one of these people who ridiculously expect to be able to motor for free or feel like depreciation should always be for someone else but I'm not sure I see a major difference between the two. Certainly not the "mclaren s
t money whereas Ferrari don't" difference that some would have you believe.
And hasn't it always been the case that speccing cars with ridiculous amounts of options has always been the fastest way to lose money?
One thing I can say, is that second hand at the £150k level both are shifting. I say this from persona, experience of losing out on three mp4s and one 458 which is reasonably costly when trying to do this from Dublin.
I'm in the market for one of these or a 458 and have been scrutinising the market closely for six months.
And to be honest, it looks to me like both are suffering similar depreciation over a year from new.
Anyone looking for a one year old 458 with a ton of options can easily find a car that was £210k+ new down in the £160k-170k range. Is that any bette or worse than what we are talking about for mp4?
Now I'm not one of these people who ridiculously expect to be able to motor for free or feel like depreciation should always be for someone else but I'm not sure I see a major difference between the two. Certainly not the "mclaren s
t money whereas Ferrari don't" difference that some would have you believe. And hasn't it always been the case that speccing cars with ridiculous amounts of options has always been the fastest way to lose money?
One thing I can say, is that second hand at the £150k level both are shifting. I say this from persona, experience of losing out on three mp4s and one 458 which is reasonably costly when trying to do this from Dublin.
Thermonuclear said:
Haha I don't think he's handicapped, although prob not the sharpest tool in the box it has to be said.
Don't exactly know his reasoning, probably some man-maths came into the equation, but I think at the time when he purchased it there was still this illusion of more people trying to buy them than cars that were physically available, and/or even, rumours of people paying over list just to get in one. So with his 'good deal', even 6 months later hopefully he might get what he paid for it.
He's clearly not the sharpest tool in the box if he believed dealers were discounting cars while some other people were paying over list to get one!!! I don't think he's handicapped, although prob not the sharpest tool in the box it has to be said.Don't exactly know his reasoning, probably some man-maths came into the equation, but I think at the time when he purchased it there was still this illusion of more people trying to buy them than cars that were physically available, and/or even, rumours of people paying over list just to get in one. So with his 'good deal', even 6 months later hopefully he might get what he paid for it.
R11ysf said:
Thermonuclear what is your friend being bid for his 1 year old car by dealers? What was the list price and what was his discounted price?
Any actual numbers here would be very useful, also if anyone knows what the lowest bids for spiders are now please I'd love to know. Is the £120k spider at the end of the year a distinct possibility?
I can't remember exactly, but his looks similar to the one currently advertised at Dick Lovetts for £146k, although I think his has done more miles at 10 or 12k. I'm sure he said that he was bid 120 / 125k or something like that, which looking at the Lovett car for £146k I guess is probably about right.Any actual numbers here would be very useful, also if anyone knows what the lowest bids for spiders are now please I'd love to know. Is the £120k spider at the end of the year a distinct possibility?
andrew said:
i don't see that mclaren depreciation is any worse than other regular production run cars
once the new model limited supply honeymoon year is over, it's circa 30% in year one, then half price after maybe three to four years
all very average
+1. once the new model limited supply honeymoon year is over, it's circa 30% in year one, then half price after maybe three to four years
all very average
My GTB is in perfect nick, has done 13K and has lost c 60% since I bought it new. I'd be happy to sell but can't be arsed with the trade offers. My 550 went from £125K (one year old) down to £ 25K trade at its lowest point, and has doubled since, but I'm still down, and that's excluding years of pampering. All to be expected. Fortunately I'd sell the house before my 550 as it was my first Ferrari, and it's a sublime motor. As andrew says, new £ 200K+ "volume" cars will suffer average depreciation.
Personal I know, but for me, while depreciation is average, the actual amounts involved on a fully loaded new car is just silly - even if one is paying cash, and can afford it. I can't kick the habit completely but now only buy classics or Ferrari limited editions.
APOLO1 said:
nothing could be further from the truth. In my view the 12C is the best performance car to hit the market in the past 10 years. I am about to buy my 3rd
To put over 600BHP, into a rear wheel drive car that a person as in myself with limited skills, can drive on track within times that I have only dreamt about, let alone be used a continental daily driver.
I did over 15 full on track days in my coupe, It never missed a beat.
What I do no understand is as to why large % discounts are offered from new or nearly new cars, as such driving the residual prices into the ground. Why not just realign the price from new and hold firm. This IMHO would help the brand no end.
there isn't a huge difference between the used 458s advertised on here and the mclarens price wise ,you can buy a 12 reg in either car for circa 150k ,so its depreciation is not out of sync with the market.To put over 600BHP, into a rear wheel drive car that a person as in myself with limited skills, can drive on track within times that I have only dreamt about, let alone be used a continental daily driver.
I did over 15 full on track days in my coupe, It never missed a beat.
What I do no understand is as to why large % discounts are offered from new or nearly new cars, as such driving the residual prices into the ground. Why not just realign the price from new and hold firm. This IMHO would help the brand no end.
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