How much money does it actually cost to produce a car?

[oohhh yeah]

For example, a regular family car like a corolla costs $15000. I assume a lot of the cost is actually building the car.

But for a nice car like an M3, how much money does it actually cost to make it? Is the rest of the $ just research and development costs,and the fact that just because it's an ///M car they can jack up the price?

Because when I think about it, a Lexus ISF is the same thing as a camry. Just a bigger engine, better shocks (maybe 5k here?) a different design (no money needed). Where does the rest of the money go?

Same for a Ferrari, does it even cost 100k to produce it? Do they just jack up the price just because it's a Ferrari? The rest of the money is just for the Ferrari badge? Or to the research and development costs?

 

[Beerz]

All cars cost exactly USD$21.50 to produce. The rest of the price tag is just profit.

 

[terminator363]

Beerze is correct, but that's the price for Maybachs. A Corolla would be around 5cents.

 

[TB]

Because when I think about it, a Lexus ISF is the same thing as a camry. Just a bigger engine, better shocks (maybe 5k here?) a different design (no money needed). Where does the rest of the money go?

Last time I checked, a Camry wasn't made out of spun carbon fiber that required a special loom to make said spun carbon fiber. Both the loom and the software had to be engineered specifically for this one vehicle. That all costs money to develop.

The engine, while, yes, is "just a bit bigger" than a Camry also takes R&D to develop, which cost money. You have to pay those employees if you want to keep them.

But the big problem I have with your comment I quoted - the design costs nothing? Really? Having worked on designing numerous retail stores (all the same brand, mind you) I can without a doubt say that no matter how similar a product is and no matter how much you are able to reuse from one to the other, it is still a huge undertaking designing something. It doesn't just happen and it certainly isn't free.

What you are paying for when you buy a vehicle is the parts and pieces that actually make up the vehicle, the thousands of hours of design, redesign and reredesign for all of those pieces and then the badge that's placed on the front and back.

Why can the likes of Ferrari, Lamborghini, Lexus et al charge these prices? Because people will pay them. Stop paying for them and watch the prices drop.

 

[Type S Tony]

It would be very different for each manufacturer but you need to understand that when producing things on a mass scale costs are significantly lower than what it would be to produce a few of said car.

Also need to take into consideration payroll & factory operating costs.

 

[TB]

when producing things on a mass scale costs are significantly lower than what it would be to produce a few of said car.

How could I forget mass production assembly line?!?

My apologies, Mr. Ford.

 

[Villain]

Overhead costs are a killer.

 

[Grayfox]

It is why you get those cheap ugly yellow halogens on cars an not good high performance xenon bulbs.

 

[Lekkeri]

When I studied automotive electronics, we checked that an average car costs to the producer about 5000€. More expensive materials of course costs more but I guess that's a starting point.

 

[Villain]

When I studied automotive electronics, we checked that an average car costs to the producer about 5000€. More expensive materials of course costs more but I guess that's a starting point.

Where did that figure come from? The cost of a car has to include everyone who works on developing it, the factory machines which are custom built for it, the labor (wage, training, & benefits), the support staff in the plants, the distribution to dealers, advertising and other branding, etc.

 

[Lekkeri]

Where did that figure come from? The cost of a car has to include everyone who works on developing it, the factory machines which are custom built for it, the labor (wage, training, & benefits), the support staff in the plants, the distribution to dealers, advertising and other branding, etc.

If you take those costs and divide it with the amount of cars produced the price added to each car is minimal. I agree, it is really low and I was shocked that how much there is "air" in car prices.

 

[oohhh yeah]

Yeah the costs of everything does come into play, but I'm wondering, when I'm standing in front of a Ferrari or something, how much money in parts is actually in front of me. Because when you have an assembly line, the costs are just the parts and labour. I assume most of the costs are the research and development costs, and the costs you can't actually touch/see.

 

[Grayfox]

Lets not for get warranties.

Extra cost to cover it for you and the other people who buy the car even if you don't get a warranty issue.

 

[Lekkeri]

Yeah the costs of everything does come into play, but I'm wondering, when I'm standing in front of a Ferrari or something, how much money in parts is actually in front of me. Because when you have an assembly line, the costs are just the parts and labour. I assume most of the costs are the research and development costs, and the costs you can't actually touch/see.

Well electrical parts are near free. So the cost to make ie an ECU is close to nothing. Rest of the car is metal and plastics. I guess those also doesn't cost much when bought in large numbers.

Lets not for get warranties.

Extra cost to cover it for you and the other people who buy the car even if you don't get a warranty issue.

Also car manufacturers make most money from aftersales, parts and service done.

 

[axletramp]

I've read that the development cost of a completely new model is between $1 billion and $6 billion, depending on the model and retooling implications. Ford spent the latter on designing and constantly developing the Mondeo throughout it's lifespan. It appears a lot, but Ford also spent $250 million on developing the Edsel and that was 1957 (approx. $2 billion today)!

So it's easy to see why cars cost what they do. The vast majority of the cost has already been incurred before they hit the showrooms. The actual production costs (materials, facilities, labour, logistics, etc) are relatively small.

 

[daan]

Yeah the costs of everything does come into play, but I'm wondering, when I'm standing in front of a Ferrari or something, how much money in parts is actually in front of me. Because when you have an assembly line, the costs are just the parts and labour. I assume most of the costs are the research and development costs, and the costs you can't actually touch/see.

Each Veyron reputedly cost Bugatti (VW) $5 million dollars to make. That'll include making the parts and putting them together, the salary of the workforce and the cost of researching and developing it etc.

Every Polo sold will be helping to offset the Veyron debt...

 

[Grayfox]

Each Veyron reputedly cost Bugatti (VW) $5 million dollars to make. That'll include making the parts and putting them together, the salary of the workforce and the cost of researching and developing it etc.

Every Polo sold will be helping to offset the Veyron debt...

VW Fox will help more being made of plastic and what not.