How much does a Ferrari/Lambo dealer make on a new car?

[Mario149]

If a dealer sells a new car for £200k (so £160k ex VAT) made up of say £180k base price plus £20k of options, how much does the factory let them keep?

[sone]

I'm wagering less than most people think!

[Pommygranite]

At a guess 5% on the car, 8% on options and more on finance.

I would suspect servicing and parts is the real earner.

However I am totally guessing on the former.

[matc]

14% including reg bonuses and maintaining dealer standards targets etc. Would probably only play around with the front end margin of between 7-10% as that's guaranteed, trading on the rest is a risky business!

Thats my un-educated guess anyhow!

[JamieBeeston]

matc said:

14% including reg bonuses and maintaining dealer standards targets etc. Would probably only play around with the front end margin of between 7-10% as that's guaranteed, trading on the rest is a risky business!

Thats my un-educated guess anyhow!

Aye, I'd guestimate 10-15% of list.

[Lambo FirstBlood]

My understanding is that 12% is standard margin. There is also a 'bonus' from the manufacturer if targets are hit.

[Shmee]

It's not Ferrari or Lambo but Audi have a standard of 13% on list price is dealer profit margin, hence why you can typically get 7-8% off but not much more.

[Mario149]

Interesting, thanks for the replies everyone

[sone]

Shmee said:

It's not Ferrari or Lambo but Audi have a standard of 13% on list price is dealer profit margin, hence why you can typically get 7-8% off but not much more.

If you can get 7-8% discount on a 13% margin I think your doing well. At 13% gross I'd guess their down to 3 or4% net at best, after the costs of flash showrooms and well dressed staff that don't grunt etc.

[POORCARDEALER]

Some of the margin is paid on customer care targets etc etc

[Mosi]

Check out the Net Profits / EBIT on some of the quoted Dealerships, its pretty damn low IMO

[LamboBrum]

Bottom line of a very good dealer group - Return on Capital Invested SUB 3%?!

[bromers2]

LamboBrum said:

Bottom line of a very good dealer group - Return on Capital Invested SUB 3%?!

Might as well stick it in the bank then - not worth the risk.
Why bother ?

[Pommygranite]

bromers2 said:

Might as well stick it in the bank then - not worth the risk.
Why bother ?

Because it comes with parts and service - the real breadwinner.

[sone]

bromers2 said:

LamboBrum said:

Bottom line of a very good dealer group - Return on Capital Invested SUB 3%?!

Might as well stick it in the bank then - not worth the risk.
Why bother ?

Depends what dividends the directors have drawn to bring it down to net.
Besides youve got to have the cash to get your 3-4 % in the first place from the banks.

[johnnyreggae]

sone said:

Depends what dividends the directors have drawn to bring it down to net.

You sound jealous yet almost all Lambo/Ferrari/McLaren dealers are part of publicly quoted companies so you too can participate in these dividends

[sone]

johnnyreggae said:

sone said:

Depends what dividends the directors have drawn to bring it down to net.

You sound jealous yet almost all Lambo/Ferrari/McLaren dealers are part of publicly quoted companies so you too can participate in these dividends

Not jealous, partake in my own dividends thanks.

[Foundy]

bromers2 said:

LamboBrum said:

Bottom line of a very good dealer group - Return on Capital Invested SUB 3%?!

Might as well stick it in the bank then - not worth the risk.
Why bother ?

I work for a dealer group that deals in these cars.. and Lambo is right about 3%. You may say not bother but the owner may get enjoyment from the cars/employment for people etc May get more money from the bank, but if I were in their position to run a profitable company in something you enjoy, thats worth more in my eyes.

[LamboBrum]

Pommygranite said:

Because it comes with parts and service - the real breadwinner.

The sub 3% figure is for the entire business! In a well-run business, the workshop element should absorb all the overheads, leaving the Sales Dept's profits as the cream

Trust me, we make nothing like the money you might think from the outside. I sincerely wish we did...

[Drclarke]

LamboBrum said:

The sub 3% figure is for the entire business! In a well-run business, the workshop element should absorb all the overheads, leaving the Sales Dept's profits as the cream

Trust me, we make nothing like the money you might think from the outside. I sincerely wish we did...

No, don't forget this is pistonheads.

Every (St)ealer has £10k profit in every car to discount to a buyer otherwise they will "just walk away"