Car Companies Profit Margin

[bmorris]

Hello all,

I'm hoping someone who is more in the know in the car industry then I what sort of profit margin car companies (such as Ford) aim to make on each car they sell.

So this would be the difference between what it costs to build the car and the cost they sell it to the dealers at.

Thanks for any information you can provide

[wrongwaynorris]

That is one of the most closely guarded secrets in the car game .

[burnz]

around 18,000 dollars for a commo.
thats line, paint, wages, factory overheads..
a V6 or V8 simply means higher margin.

[Dr Smith]

Originally Posted by burnz

around 18,000 dollars for a commo.
thats line, paint, wages, factory overheads..
a V6 or V8 simply means higher margin.

You would also need to add the R&D costs in devoloping the model, which is dependant on how it's amortised, warranty "allowance" per unit, sales & marketing and shipping.

[mik]

Originally Posted by burnz

around 18,000 dollars for a commo.
thats line, paint, wages, factory overheads..
a V6 or V8 simply means higher margin.

that sounds like an awful lot clear profit on one car when considering all cost of running a business these days ?

[Dr Smith]

Originally Posted by mik

that sounds like an awful lot clear profit on one car when considering all cost of running a business these days ?

It's nowhere near that, Burnz has estimated what it might cost to build just the car itself.

[GT450]

and I would like tonights tattslotto numbers. I think I would have a better chance than the OP.
GT450

[mik]

Originally Posted by Dr Smith

It's nowhere near that, Burnz has estimated what it might cost to build just the car itself.

yeah , i was thinking possibly more along the lines of 5k or less.

[madmatty]

i read that holden spent over a billion dollars developing the ve commodore.

[burnz]

Originally Posted by mik

that sounds like an awful lot clear profit on one car when considering all cost of running a business these days ?

you can buy a complete rolling chassis (4 wheels, suspention and beam axel; no diff, engine, gearbox)
$12,000 on the condition never to be rego'd..

[mik]

Originally Posted by burnz

you can buy a complete rolling chassis (4 wheels, suspention and beam axel; no diff, engine, gearbox)
$12,000 on the condition never to be rego'd..

with respect, that`s a long way short of a car.

[bmorris]

Thanks for the information burnz, very helpful as a starting point. You have to also add in dealer profit so when you think about it makes sense on a XR6 selling for 32k during sales.

[wrongwaynorris]

Originally Posted by bmorris

Thanks for the information burnz, very helpful as a starting point. You have to also add in dealer profit so when you think about it makes sense on a XR6 selling for 32k during sales.

You would be staggered if you saw just how little a dealer makes on a new car .

[gazza414]

4 to 5% profit on the retail price.

[2011G6E]

Wouldn't R&D be a cost that would be tax deductable in some way, a cost of doing business?

It is a closely guarded secret alright, and has been for many many years. Wheels magazine and Motor have done reports over decades and tried to work out how much a car costs to make but it's very closed-lip stuff.

Spare parts are easier to work out a margin on...I believe it might have been the RACQ who once did a study back in the late seventies taking a popular family car, a Kingswood, and picked the most common model. The price was about $7000 off the showroom floor for the car itself on the road, but if you went in and purchased all the spare parts to make the car from the dealer (even a body shell as you used to be able to buy from the manufacturer), it cost something like more than twenty grand, and then you had to get it put together! As far as I know, no one has done this sort of study again, but it would be fun to try.

[Gobes32]

Around 18 to 20k per unit to build a new Falcon. That is raw materials, labour, etc. Then you have the costs to run a factory i.e maintenance crews, workcover premiums, transport, HR, Salary team, etc. These are all INDIRECT costs and need to come out of the "profit" per se.

[gunner]

If Ford (global) sold 2.2 million cars in 2012 and they made 8.8 billion in profit, then my maths tells me they made on average $4000.00 per car.

This, however, is an average. Profit margin in the US would be higher. So as an uneducated guess I would say they'd aim to make a couple of grand for a Fiesta but maybe $8k for an F150???

[gtfpv]

Originally Posted by Gobes32

Around 18 to 20k per unit to build a new Falcon. That is raw materials, labour, etc. Then you have the costs to run a factory i.e maintenance crews, workcover premiums, transport, HR, Salary team, etc. These are all INDIRECT costs and need to come out of the "profit" per se.

i have no idea but would tend to go with this answer .
i would imagine the $18000 for an fg XT , would be including profit , and all the previous costs already raised , like amortisation , design materials etc .
out of profit made some of it would have to go towards invesment of new designs etc .
so i would think that the $18000 would cover all of the above .
and maybe more for and xr6 , but an xr6 would only cost a little more to make , therefore a bigger prifit margin as you go up spec .

I'M ONLY ASSUMING BUT THAT HOW I WOULD IMAGINE IT TO BE .

[Gobes32]

It is 18k just in DIRECT costs, R&D and all other costs are not included.

[gtfpv]

Originally Posted by Gobes32

It is 18k just in DIRECT costs, R&D and all other costs are not included.

so the dealer would be paying much much more then .

[Gobes32]

If the dealers are to be believed, they claim they only make 5% profit on each car they sell.

[Rodge]

Originally Posted by gazza414

4 to 5% profit on the retail price.

Yeap, I had a look at Ford's global result the other day in the states and it appears that net profit as a percentage of gross sales is in that range on a global basis.

Funnily enough many airlines would be over the moon to have a net profit percentage that high.

[gazza414]

Ford Credit props up FORD...people here are making statements based on

Just go thru their Annual Report