how many car to sell before a big car manufacture breaks even?

[amir_j]

Curious as to roughly how many cars say bmw need to sell of a particular model before they break even?

Edited by amir_j on Wednesday 31st March 13:51

[Eviltad]

Entirely depends on development costs and materials.

There is no single answer.

If you want a figure, I'd say 42.

[amir_j]

Eviltad said:

Entirely depends on development costs and materials.

There is no single answer.

If you want a figure, I'd say 42.

Hence the roughly; how about the 3 series?

[The Wookie]

Generally quite a lot. If it costs a billion to develop and they're making a few grand a car on average, you're talking 10's of thousands, if not hundreds of thousands.

It depends entirely on the business plan of the specific vehicle. The development budget will be entirely centred on sales forecasts and unit cost predictions

[kiethton]

I would think that some cars dont break even during their shelf life time but costs are made back through the sale of replacement parts and servicing items....would certainly account for the costs of some parts...£330 astra headlight anybody?

[10JH]

They must split a lot of development costs with other models. There is so much part sharing, even between competing manufacturers.

[Ozzie Osmond]

It's much easier to look at a small manufacturer such as Morgan to get a feel for this subject.

For the big manufacturers the question is broadly irrelevant. For instance, look at the Nissan GTR. It's a lot of car for the money. It also gives Nissan a "halo" model to attract customers into the showrooms and adds a feel-good factor.

My guess is that Nissan may just break even or even lose money on each GTR sold. Meanwhile the mainstream models will cost very little to build in terms of "parts and labour cost per car" whereas the R&D, cost of building the factory etc will be massive.

One way of look at this brings the question into sharp focus. Imagine a car factory which has a maximum capacity to build 100 cars a day:

- if it's building 99 cars a day and then increases production to 100 cars a day the "cost" of building the 100th car is very small - essentially just the parts and labour.

- if it's already building 100 cars a day and receives orders for one extra car per day, how much will that extra car cost to build? An absolute fortune because you have to build a new factory!

[bazking69]

It's one of those questions with so many mediums and factors that there isn't a definative answer.

As a very rough answer say for a mass produced keen selling model, well into the tens of thousands.

[excel monkey]

bazking69 said:

It's one of those questions with so many mediums and factors that there isn't a definative answer.

As a very rough answer say for a mass produced keen selling model, well into the tens of thousands.

Hundreds of thousands, surely?