How much does it cost to build a car?

[robemcdonald]

Reading the story about the revisions to the MP4 12C got me thinking. How much does it cost to build a car like that? (total project cost) If you had a blank sheet of paper / empty had disk and a field to build a factory in.

The basic price of the 12C is approximatley £170K what profit would there be in that for McLaren? I have been trying to work out how they can do it, but can't seem to get the figures to add up.

Maybe someone can enlighten me.

[JayTee94]

I am not sure, but I know some car makers make cars at a loss. (ie: LFA, Veyron)

You would also need to factor in R&D into that sum aswell.

[DanDC5]

I would imagine there's no profit in their road car project until at least 3 or 4 new models have been made and sold. The initial setup, development, factory and machine costs must run into hundreds of millions.

[Snowboy]

Are you talking about a TVR/Noble sort of thing where an independent company makes some cracking supercars to sell for a profit.

-or-

Are you talking about an established company that wants to make some sort of flagship model just to prove a point. Like the Veyron or Concorde.


Can we factor in servicing costs to the profit margin?

In the former I would guess it would cost about half the retail price to make the car.
But, I might be way off.

[robemcdonald]

This is what I thought, it doesn't really seem like a realistic way of making money. Which is why so many companies fail I guess.

In my very basic calculation I worked out that McLaren would probably need to sell something like 5000 to break even. Not sure if there is enough demand to cover that, just to break even.

[louiebaby]

It's similar to new medicines as well. The costs to get the product to market can be huge, and easily run into the hundreds of millions of pounds.

These arguments have been levied at Pharmaceutical companies who charge £10 for a tablet that only costs them 10 pence to make. The problem is that the first tablet cost £1,000,000,000 to make, and from the rest of their profits, they also need to cover the costs of products that fail to make it to market.

Whilst I'm no clearer to the answer, let's throw another spanner in the works. To car companies make cars to sell, or do they make cars to sell finance products on?

[fizz47]

Arash Cars (Farboud GTS and then Arash) did exactly this.

He pretty much had a blank cheque book- factory space from his parents Medical supplies company and attemted / is attempting to build a super car. Speak to him and he will be the first to admit that on paper it sounds like a childhood dream but in reality its not as much fun.


I cant speak first hand of his financial position but im guessing he is a few mil from turning a profit. At the same time his development costs were not a fraction on Mclaren though he does seem to have built a car that has super-car credentials... so it is possible to do without huge R&D budgets.

Lets see if his cars actually sell though..