Re: Why does Japan not allow US autos to be imported to their country?

Porsche operating profit is not 50% of revenue,. According to those same articles I referenced below, Porsche's operating profit is 19% of revenue. Toyota's profit is also 19% of revenue, so profit margins are the same.

Profit margin is a valid comparison only when comparing similar sales. For example, if a child purchases an packet of Kool-Aid for 25 cents and then sells 10 servings for 25 cents each, the child's operating profit is 90% of revenue. Could anyone argue that the child's Kool-Aid sales operation is more profitable than Toyota or even Kraft Foods?

The term "profitable" is not a synonym for profit margin.

The OP's post was erroneous.

Where did you get 19% profit margin for Toyota? Porsche this year is 19%. That is very high for automotive company. Toyota is 7% this year, or about the same as last year. Porsche last year was 10%, which still beat Toyota. Industry wide, profit margin is about 2-3%. Just do a "profit margin Porsche" on google.

What is your point? No one is comparing Kool-Aid to Porsche here. We are all talking about automotive industry. Where did this Kool-Aid come from? Toyota and Porsche is a somewhat fair comparison. Although Toyota is a huge company compared to botique companies like Porsche. Obviously, if Porsche were to expand their line to be as big as Toyota, they would not have as good a profit margin. Porsche would loose their exclusivity to command such a high price for their car.

Profitable can also mean profit margin depends on how you use it. The word profitable is a very general word, you can use it anywhere. ie Is not profitable for me to continue this discussion. Or is not profitable for me to stay up late tonight. I would not say his argument was simply wrong.

Ben

I got 19% from the articles I provided links to, which were snipped out of your post.

I Googled "profit margin porsche" as suggested and the top article from Business Week

that for a fiscal half year ended January 31, Porsche's profits were $153 million on sales of $3.7 billion or 4.1%. That number sounded too low so I found Porsche's annual report 2004-2005 income to sales ratio is 18.8%, which is more in line with the other article.

From Toyota Motor Corp's web site showing the first half of FY 2006,

's operating income ratio is 8.1%.

My point was that comparing profit margins for companies with vastly different sales is not necessarily a valid comparison. Porsche's 90,000 vehicle sales is a little over 1% of Toyota's 8 million vehicle sales.

The OP claimed that Porsche was the "most profitable" car company in the world. No one with any knowledge of the automotive business would agree with that statement. On the other hand, saying that Porsche's profit margins were the best in the industry could be correct.

Porsche used to be part of the VW-Audi conglomerate. When did they go separate?