Porsche Fights Gray Market Import Threat

Nearly 10% of the Americans who buy new Porsche sports cars get them from so-called gray market importers, and the company said Monday that it would fight back with aggressive marketing techniques.

John Cook, president of Porsche’s U.S. sales subsidiary, also said the company eventually will make all of its European models available to U.S. buyers, will offer extended warranties and will hold down prices for the second consecutive year.

Gray market cars, mainly expensive models built for Europe, are sold by unauthorized importers who modify them to meet U.S. safety and pollution laws. The most sought-after gray market cars are European Porsche, Mercedes-Benz and BMW models.

The asking prices often are far below those charged by conventional dealers. Also, the gray market importers bring in certain models that aren’t otherwise available here.

Cook said the gray market has little impact on the profits of the West German corporate parent Porsche AG, since the profit on a sale made in Europe is roughly equal to one made here.

Dealers Complain

But U.S. dealers, who make between $6,000 and $15,000 profit per car, complain that gray market importers infringe on their turf and often refuse to service the cars. Also, Cook said that Porsche is concerned that gray market cars may damage its image of reliability and workmanship.

“It doesn’t change profitability. We’re doing this because we’re concerned about future customer relationships,” Cook said.

Cook said the company that he heads, Porsche Cars North America, will finish the 1985 model year with sales of nearly 22,000 cars.

Gray market Porsche sales are averaging 2,400 a year, he said.

He projected that the company’s U.S. sales would hit 27,700 for the 1986 model year, a 25% increase over 1985. That also would put the United States at more than half of the worldwide sales, a trend that Cook said will continue.

“It could get to be as high as 60%,” he said, but added, “We don’t ever intend to sell more than 35,000 to 38,000 cars in the United States. We don’t want to sell too many cars, because one of the reasons we sell is because we’re special.”

Porsche base prices range from $22,000 for the 944 to $50,000 and up for the 928.