Profits for Manufacturers?

Roger Mellie Man on the Telly

I wonder how much a big car manufacturer makes in clear profit on a car? Say on a Ford Focus for arguments sake.

Buying in bulk contracts means components must be very cheap. I imagine they get 4 tyres for €80 for example, or less. I think the engine is the most expensive part.

I suppose the dealers make more per car than the manufacturer as they only sell a few a month whereas the maker is shipping thousands.

joujoujou

Buying in bulk, especially from China (or other relatively cheap suppliers) is the most profit-making movement.

As well as built-in obsolescence.

corglass

I think you're over estimating the profits there. 4 tyres wouldn't be got for less than 160 I'd say.

Remember major tyre dealers like camskill make maybe 15% on tyre sales and sell decent OEM type brands for about 50 a corner

mickdw

I don't think you work out so easily profit per car.
They would have to build thousands before they even make back the development costs.
Something like a citroen c6 would have made a huge loss for manufacturer due to tiny sales whereas a big selling car would have a tiny development cost per unit.

kyote00

in 2014, Toyota posted profits (net) of 17.9 billion dollars - with sales of approx 10 million cars.

Doing the maths, thats approx 1800 dollars profit per car ....

http://www.businessinsider.com/toyota-posts-record-179-billion-profit-2014-5?IR=T

NIMAN

I would say the likes of the Focus now would be making healthy profits for Ford, as the new one is very similar to the old one. Wouldn't say too much R&D was needed there.

NIMAN

kyote00 wrote: »

in 2014, Toyota posted profits (net) of 17.9 billion dollars - with sales of approx 10 million cars.

Doing the maths, thats approx 1800 dollars profit per car ....

http://www.businessinsider.com/toyota-posts-record-179-billion-profit-2014-5?IR=T

Thats some amount of profit considering the amount of bad press they had about recalls. They had many high profile recalls, and I am sure 2014 included some.

Atlantic Dawn

They seem to be all engineering the cars so that the consumer is afraid to tackle basic jobs like oil and bulb changes, brings in big aftersales margins.

Technique

I used to work with a guy who was an engineer with Renault in a previous job. He told me that there was about £5000 worth of parts in an average family car. Of course this doesn't include r&d, delivery etc.

Cuddlesworth

NIMAN wrote: »

Thats some amount of profit considering the amount of bad press they had about recalls. They had many high profile recalls, and I am sure 2014 included some.

I don't understand the idea behind a recall being bad press. I would much prefer a manufacturer that acknowledges a problem and fixes it, rather than one that hides from it.

Joe 90

corglass wrote: »

I think you're over estimating the profits there. 4 tyres wouldn't be got for less than 160 I'd say.

Remember major tyre dealers like camskill make maybe 15% on tyre sales and sell decent OEM type brands for about 50 a corner

I did read something a while back that suggested that tyres were in fact quite cheap, leaving the mould as it were, but that the supply chain was so long that lots of bits of profit were added along the way. No single husge mark ups but several small ones which added up.

Anyway, thats what I read. no idea of how much truth there is in it.

Joe 90

Atlantic Dawn wrote: »

They seem to be all engineering the cars so that the consumer is afraid to tackle basic jobs like oil and bulb changes, brings in big aftersales margins.

I have an Exige and before that an Elise. Both have a Rover K based engine. Pure MGF in the Elise and seriously modded in the Exige. When I bought the Elise that cam belt change was scheduled for either every 4 years or every 5, can't remember which. Over the years the period dropped until it was every year. Then it increased, now back to every 4 years. It turned out that this was due to complaints from the main dealers to Lotus about not getting enough work.

Chippy01

Cuddlesworth wrote: »

I don't understand the idea behind a recall being bad press. I would much prefer a manufacturer that acknowledges a problem and fixes it, rather than one that hides from it.

Exactly!!!

colm_mcm

Its the hysteria the media creates with them, rather than the recalls themselves.

Supergurrier

Alot of the profits is in aftermarket sales on parts etc.

Certain models are sold at a loss after R+D/Advertising i reckon to enter/fill a segment gap.

You also have to remember big brands like ferrari also make ALOT of money on branded merchandise

visual

NIMAN wrote: »

Thats some amount of profit considering the amount of bad press they had about recalls. They had many high profile recalls, and I am sure 2014 included some.

Be a lot more worried about the manufacturers that have little or no recalls.

Desolation Of Smug

Spare parts is the biggie for profit. Much the same as for any machinery/forklift/truck manufacturer. Spares=Dorrar.

joujoujou

Spare parts make profit only if end user buys genuine ones. And even doing so, very often buys OEM supplier's parts.

Lots of end users buy non-OEM spares or second hand though.

Markcheese

colm_mcm wrote: »

Its the hysteria the media creates with them, rather than the recalls themselves.

With most things in life -it's not the person who causes the problem that takes the rap - it's the crowd who discover it and try fix it - (main reason politicians try sweep things under the carpet )