How much does an average car cost?
Discussion
...to manufacture, I mean. Does anyone on here know? In addition to all the development and assembly costs, there's a mind-boggling number of sourced components in even an average modern car, as well as any potential warranty costs.
To be honest I'm surprised they're so cheap nowadays, considering what goes into them.
To be honest I'm surprised they're so cheap nowadays, considering what goes into them.
About 10 years ago I read that the out of the factory price of a Ford Mondeo was about £4k.
Yes £4k. What would that be now? £6k maybe?
Makes sense really, compare it to motorcycles – most of the expensive bits are the same on both, yet the average 4 cylinder bike costs £6-8k OTR.
The only real difference on the car is the glass and the interior trim (the extra metal in the body is dirt cheap in industrial quantities) which hardly make up an extra £20k.
Plus, of course, cars benefit much more from economy of scale.
Yes £4k. What would that be now? £6k maybe?
Makes sense really, compare it to motorcycles – most of the expensive bits are the same on both, yet the average 4 cylinder bike costs £6-8k OTR.
The only real difference on the car is the glass and the interior trim (the extra metal in the body is dirt cheap in industrial quantities) which hardly make up an extra £20k.
Plus, of course, cars benefit much more from economy of scale.
LotusOmega375D said:
...to manufacture, I mean. Does anyone on here know? In addition to all the development and assembly costs, there's a mind-boggling number of sourced components in even an average modern car, as well as any potential warranty costs.
To be honest I'm surprised they're so cheap nowadays, considering what goes into them.
The trouble is, "cost" needs defining.To be honest I'm surprised they're so cheap nowadays, considering what goes into them.
In it's easiest form, it'll just be raw cost of part/materials + 'x' hours labour @ 'y' rate.
But even this isn't as dry cut, as components will have varying costs depending on how many/when they were bought. And labour isn't a constant due to the number of people involved.
Also at what point does the "manufacture" finish? Is it when it rolls off the line, or after it's prepped for transport, or indeed when it reaches a dealer?
The more complex answer would be trying to extrapolate R&D costs, although an engine may be used across many models and even the models replacement. Future R&D costs. Production maintenance or renewal. Then there's all the other things that cost a business, such as premises, insurance, pensions, HR departments, electricity, cups of tea and so on. They are all indirect costs, but at the end of the day, without them, the vehicles wouldn't get built. So they are an integral part of the cost to build.
DJP said:
About 10 years ago I read that the out of the factory price of a Ford Mondeo was about £4k.
Yes £4k. What would that be now? £6k maybe?
Sounds about right. Pretty sure I read somewhere that there was a roughly equal split between direct cost, development cost, and sales cost.Yes £4k. What would that be now? £6k maybe?
So an £18k Mondeo would be:
£6k direct manufacturing cost (materials, labour, factory overheads)
£6k development costs (£xbn divided by total global sales)
£6k sales/distribution costs (advertising, motorsport sponsorship, bulls
t social media campaigns, giving free cars to celebrities and footballers, flying journalists out to exotic locations for product launches, warranty costs, profit margins for both manufacturer and dealers)Not in the motor industry, so may be completely wrong.
Edited by excel monkey on Friday 13th September 11:37
LotusOmega375D said:
Wow 6k to build a modern family size car from scratch!
Makes you wonder why the classic car trade reckons you need to spend 100k to properly restore an already extant and technology-free E-Type Jag!
That's because you're building one car by hand and not stamping out a million in a factory.Makes you wonder why the classic car trade reckons you need to spend 100k to properly restore an already extant and technology-free E-Type Jag!
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