The lowest possible price for a new car

[Greg_D]

I'm bored.......

Hence me wondering how cheap you could feasibly sell a 'proper' car for - Let's say this astra at £12,995 for the sake of argument.

http://www.vauxhall.co.uk/vehicles/vauxhall-range/...

What i'm getting at is if everyone down the line forgave any profit on the vehicle and it's components, no allowance for development/R+D all down the line etc.

so if everyone from the mine owner that mined the iron ore through to the final transport company that dropped it off at your house all just passed their goods/services on at cost, how cheap could the car be???

Communism i hear you say!!!

[CraigyMc]

Greg_D said:

I'm bored.......

Hence me wondering how cheap you could feasibly sell a 'proper' car for - Let's say this astra at £12,995 for the sake of argument.

http://www.vauxhall.co.uk/vehicles/vauxhall-range/...

What i'm getting at is if everyone down the line forgave any profit on the vehicle and it's components, no allowance for development/R+D all down the line etc.

so if everyone from the mine owner that mined the iron ore through to the final transport company that dropped it off at your house all just passed their goods/services on at cost, how cheap could the car be???

Communism i hear you say!!!

How much are you suggesting the employees all the way down the chain get paid? It's probably the largest cost.

C

[Greg_D]

CraigyMc said:

Greg_D said:

I'm bored.......

Hence me wondering how cheap you could feasibly sell a 'proper' car for - Let's say this astra at £12,995 for the sake of argument.

http://www.vauxhall.co.uk/vehicles/vauxhall-range/...

What i'm getting at is if everyone down the line forgave any profit on the vehicle and it's components, no allowance for development/R+D all down the line etc.

so if everyone from the mine owner that mined the iron ore through to the final transport company that dropped it off at your house all just passed their goods/services on at cost, how cheap could the car be???

Communism i hear you say!!!

How much are you suggesting the employees all the way down the chain get paid? It's probably the largest cost.

C

unit cost, so if it takes the factory 2 hours to produce each car, then 2 hours @ average wage for that industry.

I am not advocating charity, just pass through cost of 1 extra unit at the end of the day, as it were...

[pacman1]

If no one made a penny on it, surely it would be free?

[CraigyMc]

Greg_D said:

I am not advocating charity, just pass through cost of 1 extra unit at the end of the day, as it were...

How about pensions?

If you were to pay your fair share of pension costs, the car would be more expensive rather than less (specifically for GM cars, that is).

C

[oa]

Why? You're mad!

I understand that R&D is a significant cost, so it would be cheaper if a large number of units were produced.

[CraigyMc]

Greg_D said:

how cheap could the car be???

It's this point which I take issue with. Lots of car companies are running at a loss as it is, so the phrasing of the question "how cheap" insinuates that it would be cheaper, if nobody made a profit, as if they already make a profit.

Many cars are already sold at a loss...

C

[RenesisEvo]

For a small, premium-sector 3 door hatchback, I was informed the cost of making it was between £7k and 8k - it varies a lot as you might imagine. That figure includes material, labour, energy, etc, but not sure if development, logistics or machinery/tools was included.

[PaulFontaine]

I am confused at the question. Does the op want the actual unit cost of the car or is he curious as to what the cheapest car that can be bought is? It's kind of a loaded question. Just to give you an idea (at least on US GM cars before there is even a single bolt screwed on you must factor into cost about $1,800 in legacy costs, I don't know how much for R & D, and the float or interest of the funds being used to finance the manufacture). If your looking at the true cost the margins aren't huge on regular cars, trucks, SUV's and especially luxury cars are far more profitable

[Greg_D]

pacman1 said:

If no one made a penny on it, surely it would be free?

the man at the quarry has had to put fuel in his digger to get the 10 tons of ore out the ground to refine into steel

Everyone down the line has their own cost price, plus their own processing costs, plus an allowance for profit = cost to the next person up the chain.

Take out profit for each stage on the materials for that 1 astra and how cheap would the car be?

it's a variation on a question that has been asked before, ie how much in materials to bolt a car together, ignoring legacy/development/R+D costs. except that the materials businesses are presumably making some profit or they would go bust, so if you took that away all down the line, how much for the car?

Edited by Greg_D on Tuesday 23 August 17:44

[CraigyMc]

Greg_D said:

pacman1 said:

If no one made a penny on it, surely it would be free?

the man at the quarry has had to put fuel in his digger to get the 10 tons of ore out the ground to refine into steel

Everyone down the line has their own cost price, plus their own processing costs, plus an allowance for profit = cost to the next person up the chain.

Take out profit for each stage on the materials for that 1 astra and how cheap would the car be?

More expensive than it is now, if we are to add costs if the manufacturers are already operating at a loss...?

[Greg_D]

CraigyMc said:

Greg_D said:

pacman1 said:

If no one made a penny on it, surely it would be free?

the man at the quarry has had to put fuel in his digger to get the 10 tons of ore out the ground to refine into steel

Everyone down the line has their own cost price, plus their own processing costs, plus an allowance for profit = cost to the next person up the chain.

Take out profit for each stage on the materials for that 1 astra and how cheap would the car be?

More expensive than it is now, if we are to add costs if the manufacturers are already operating at a loss...?

no they're not, not on the gross cost of bolting the vehicles together (the old mini example notwithstanding - that was BL, lol...)

Yes, if you take pensions and other overheads into consideration, some companies may OVERALL be making a small loss, but on the throughput of physical things through their factory, they are not losing out.