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Cost accounting is very complicated (even subjective in some areas) and proprietary data that can be looked at in numerous ways and will be dramatically different from model to model.
Real cost at the manufacturer level will vary enough that any number you get will be unreliable but guesstimates of margin over a full model run can be 2% to 20%... look at the corporate profit margin (which may include other enterprises) to see the big variance year to year.
Back in when I was wrenching at a Nissan dealership, it was said to order and buy each and every part over the counter to build a complete Maxima would be just over 40k. This was in 1989.
So, basically, no one knows - or spills the beans - on how much it costs THEM to make a car. .
?? Provided link & an industry source. H&A can tell you w/in a few dollars the landed price (FWIW, that's the "actual" dollars spent to produce a good up to the point that it leaves the factory floor) of most cars out there. You not wanting to $ for their report =/= "basically, no one knows..."
Cost accounting is very complicated (even subjective in some areas) and proprietary data that can be looked at in numerous ways and will be dramatically different from model to model.
Real cost at the manufacturer level will vary enough that any number you get will be unreliable but guesstimates of margin over a full model run can be 2% to 20%... look at the corporate profit margin (which may include other enterprises) to see the big variance year to year.
I'm not sure if it can be completely articulated in 1 post just how hard it is to come up with the answer to what is being asked.
Starting with, the actual parts that are purchased cost X, that is known, the parts that are made, the assembly etc, are all up for discussion, nevermind the corporate management and expenses.
cars are assembled in factories. some factories produce 1 model, some multiples. Assuming you can directly track the labor cost per assembly, how do you want to allocate plan managements time? overhead, utilities, rent? do you want to do it by time the lines are running? sqftage used by each line? number of units produced? as some function of the MSRP of the total production for teh year?
How about corporate office? is that getting allocated based upon units produced evenly? does a Corolla get the same charge as Landcruser? what about variable costs at corporate? advertising? do we specifically allocate that to the ad dollars per model the cost it to each one sold?
Now how about R&D and depreciation, are we sure the useful lives on the equipment is correct? are we depreciating too fast? R&D is spent and not capitalized until you reach a certian point. Every company is going to have R&D for products that make the cut and those that don't, how do you want to allocate those costs?
I could do multiple analysises that could vary the cost 50% or more by changing assumptions. If you're not a cost accountant or intimate with the inner workings of the company, its essentially a useless piece of info. Its a realitive data point, it really isn't to anyone who doesn't know the details on these assumptions and how to measure them against a standard metric.
If you want to know how profitable a car company is, take a look at their Financials top line and bottom line. take a look at their R&D spend compared to top line, and take a look at the useful lives on their equipment.
Real cost at the manufacturer level will vary enough that any number you get will be unreliable but guesstimates of margin over a full model run can be 2% to 20%... look at the corporate profit margin (which may include other enterprises) to see the big variance year to year.
I'm surprised the profit margin is so low, especially considering the amount of engineering that goes into getting the car design from the drawing board to the factory floor. Typical markup for consumer goods is 300% to 500%. Intel once bragged that they made more profit on there computer chips than the government made printing money. (something like 1500% profit)
I'm surprised the profit margin is so low, especially considering the amount of engineering that goes into getting the car design from the drawing board to the factory floor. Typical markup for consumer goods is 300% to 500%. Intel once bragged that they made more profit on there computer chips than the government made printing money. (something like 1500% profit)
Autos can't have quite the markup as you are competing against not only other new products but a readily available pre-owned inventory. Also consider high costs in regulation, advertising, and warranties that many products do not have (and of course each of those comes with large overhead). You do seem to be comparing to MSRP prices which would be an additional 25-30% on autos.
I'm surprised the profit margin is so low, especially considering the amount of engineering that goes into getting the car design from the drawing board to the factory floor. Typical markup for consumer goods is 300% to 500%. Intel once bragged that they made more profit on there computer chips than the government made printing money. (something like 1500% profit)
At what point in the supply chain is that kind of profit being made, and on what items?
But to get to that point where the robots are ready to go build is ignoring all the designers, engineers, safety tests, emissions tests, advertising, lawyers etc etc to get there. Trying to use this knowledge to leverage some incredible discount down at your local dealer will get you laughed out the door.
Most auto plants are still largely populated by human workers. Hence the labor cost to assemble a vehicle is high.
Trying to figure out how much it costs to make a car would be like trying to figure out exactly why airlines price their tickets the way they do: impossible.
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