: What is the manufacturer's profit margin on a new car?



ThumperPup
03-02-11, 03:22 PM
Just wondering does anyone know what the profit margin is for a new car
like say i go into my dealership spend 64k on a fully loaded New STS 4

how much did it actually cost GM to Build that car

also how much does the dealer pay for that car
and how much will they make of profit both GM and dealer

just curious if anyone knows this

dkozloski
03-02-11, 04:36 PM
Back in the dark ages when accessories were dealer installed, the dealer made 25% on the car and 40% on the stuff like heaters, radios, and outside mirrors.

Playdrv4me
03-02-11, 05:29 PM
I once figured up the value of all the used parts -- from engine to wheels to dashboard components in a 2007 Escalade to be worth about 18000.00. I figure the NEW cost to GM for all those parts from all of their suppliers is probably not far from that, maybe 25k for the raw parts before legacy costs (union healthcare), employee costs, advertising and dealer incentives. When you figure that these trucks don't sticker for any less than about 70k, and probably go out the door somewhere around 60-70 on average depending on the model, you can EASILY see why domestic automakers are in love with SUVs, and why GM fell headfirst into that trap back in 2006 when the GMT900 redesign was due. Every other car model to some extent, was either shelved, or had to make concessions for GMT900s to be rushed to production.

Cars have quite a bit less margin in them for GM, and some of them actually lose money.

RippyPartsDept
03-02-11, 05:34 PM
long answer:
there's a lot more to the costs than just the parts that go into making a vehicle... think about how much the power bill for an assembly line plant is... and the costs of all the machines and labor that goes into making a vehicle...

short answer:
very hard to say for sure

ThumperPup
03-02-11, 06:35 PM
thats what i was trying to figure in
with all said and done after the pay unione workers non union employees time power and other bills parts shipping bills
and other things here and there
was thinking and wondering

what in what it comes out to

like for a sts that stickers for about 63k with all the options id want

wondering what that actualy costs to build i cant see it costing more then 40k for each producted vehicle but then
what do they sell them to the dealers for
and if a delaer is going to sell that 63k car for probalby somewhere around 60k how much are they making

concorso
03-02-11, 07:04 PM
Ive been told the cost to manufacture most vehicles is somewhere around 50% of the MSRP. Then you add all the rest of the costs like R&D and you quickly get close to the MSRP. Think about the crazy R&D costs. GM started the Camaro project about 7 or 8 years before it finally sold to the public. Bugatti started the Veyron development 10+ years before it finally sold. IIRC, the actual profit margins on most vehicles including all costs varies, but its seldomly more then 5000. Often manufacturers will lose money of vehicles, only to make it up on their most popular sellers.

concorso
03-02-11, 07:09 PM
long answer:
there's a lot more to the costs than just the parts that go into making a vehicle... think about how much the power bill for an assembly line plant is... and the costs of all the machines and labor that goes into making a vehicle...

short answer:
very hard to say for sureThe assembly line doesnt use near the amount of power that the painting process does, if you are to believe some of the National Geographic documentaries on car factories. Hopefully some of this power drawn from the grid can be offset as more and more factories are converted to solar power. IIRC, there is a Mitsubishi plant with 25k sq-ft of solar panelling on the roof. The Ferrari factory has some as well. Google hq'ers have been converted. In the long term, it should help lower costs somewhere....

RippyPartsDept
03-02-11, 07:16 PM
yeah ... the painting process would be part of the assembly line though, right?

ben.gators
03-02-11, 09:33 PM
long answer:
there's a lot more to the costs than just the parts that go into making a vehicle... think about how much the power bill for an assembly line plant is... and the costs of all the machines and labor that goes into making a vehicle...


Let me add warranty too... It is hard to estimate how much GM pays dealerships for repairing the cars that are under factory warranty, but I guess for a luxury car like Cadillac it shouldn't be less than 7-8 k$ for each car during its warranty period.... and even in V section, as far as I read, there are some cars that have costed GM more than 15k$ for warranty works so far!

Jesda
03-02-11, 09:58 PM
Its a shame Mitsu's solar-assisted plant isn't used to build better cars. :)

Playdrv4me
03-03-11, 01:25 AM
In the late '90s, Ford was making 20k+ on every full size SUV sold. Pretty sure Jesda actually gave me that factoid, so you better believe they do make well over 5 grand on some cars. It's almost a requirement given the tiny profit on small cars.

Jesda
03-03-11, 02:12 PM
Its also how they have so much room to offer deep incentives.

concorso
03-03-11, 10:44 PM
In the late '90s, Ford was making 20k+ on every full size SUV sold. Pretty sure Jesda actually gave me that factoid, so you better believe they do make well over 5 grand on some cars. It's almost a requirement given the tiny profit on small cars.They could have used 15k worth of improvements. I could stick my pinky into a dash seam in the interior of a 90's Excursion, I think it was... Another major factor is how well the model sells. I would guess VW lost a fair bit of money on the Phaeton. It was hugely expensive to build, and it never did sell well.

concorso
03-03-11, 10:57 PM
Its a shame Mitsu's solar-assisted plant isn't used to build better cars. :)Apparently they think the Evo is too good of a car to continue to build... I dont understand their thinking. The Evo should be very profitable since its basically an optioned Lancer. They havent said the Lancer is canned, tho, only the Evo...

I couldnt care less about Mitsubishi to be honest. They offer nothing I like besides the Evo. As long as big companies keep outfitting solar panels to their factories,tho, then the cost to install systems like this for people like us will continue to drop...

Playdrv4me
03-03-11, 11:03 PM
They could have used 15k worth of improvements. I could stick my pinky into a dash seam in the interior of a 90's Excursion, I think it was... Another major factor is how well the model sells. I would guess VW lost a fair bit of money on the Phaeton. It was hugely expensive to build, and it never did sell well.

The W140 Mercedes Benz S Class surely stuck around the 8 years it did for the same reason (recoup costs). The story is that supposedly the project absolutely RAN away from them and became the most expensive in the company's entire history.

concorso
03-03-11, 11:10 PM
yeah ... the painting process would be part of the assembly line though, right? I dunno, I wouldnt really consider it part of the assembly line. Id consider the assmembly line where workers put parts on vehicles are bolt/glue them in. Most painting booths are separate from where workers are putting parts on, sometimes in separate buildings. I suppose its just pedantics, tho...

RippyPartsDept
03-03-11, 11:26 PM
i see what you're saying...

Aron9000
03-03-11, 11:54 PM
The W140 Mercedes Benz S Class surely stuck around the 8 years it did for the same reason (recoup costs). The story is that supposedly the project absolutely RAN away from them and became the most expensive in the company's entire history.

I can believe it, those things are some of the most over-engineered tanks to ever hit the road. For its time it was the most complex vehicle ever built.

Playdrv4me
03-03-11, 11:59 PM
I can believe it, those things are some of the most over-engineered tanks to ever hit the road. For its time it was the most complex vehicle ever built.

The funny thing is, when you plop down in a W220 S Class (the 2000-'06 model) it is almost IMMEDIATELY apparent the insane amount of cost-cutting they did on it to ensure it wasn't a repeat of the W140.

johnny kannapo
03-08-11, 02:22 PM
The Chevy volt cost $41,000 to build & $42,000 to buy.

Aron9000
03-09-11, 03:36 AM
The funny thing is, when you plop down in a W220 S Class (the 2000-'06 model) it is almost IMMEDIATELY apparent the insane amount of cost-cutting they did on it to ensure it wasn't a repeat of the W140.

So funny but true!!!! The W220 has to be the worst Mercedes Benz ever made.

Playdrv4me
03-09-11, 03:52 AM
So funny but true!!!! The W220 has to be the worst Mercedes Benz ever made.

Don't forget the W210 E Class too. 10 years of fail between those two cars.