Do more powerful engines actually cost more to make?
Discussion
Apologies in advance if this is incredibly stupid of me but I have always wondered if bigger engines actually cost the manufacturer any more to actually build etc or is it just down to development costs and fleecing the customer? For example a 330 BMW will be more than a 320 but for what reason? Are the parts more expensive to make as they need to be slightly stronger or what?
I'm assuming with engines that are just de-tuned versions of the model above that it's just essentially a different map and maybe exhaust?
Anyway, enlighten me
I'm assuming with engines that are just de-tuned versions of the model above that it's just essentially a different map and maybe exhaust?
Anyway, enlighten me
Depends.
In your example, a 330 had a 3 litre 6 cylinder, compared to a 320 being a 2 litre 4 cylinder. So much more cost in the larger engine. 330 also had better brakes, different suspension etc to further increase the costs
However, the 320d / 318d share the same engine, clutch, suspension, transmission etc., with the only difference being the state of tune of the engine. In this case, the price differential is also much smaller.
In your example, a 330 had a 3 litre 6 cylinder, compared to a 320 being a 2 litre 4 cylinder. So much more cost in the larger engine. 330 also had better brakes, different suspension etc to further increase the costs
However, the 320d / 318d share the same engine, clutch, suspension, transmission etc., with the only difference being the state of tune of the engine. In this case, the price differential is also much smaller.
Furthermore, the most powerful engine (if not dictated by a different map only) will likely be manufactured in smaller numbers and on an industrial product, this has a great impact on costs.
But as Wils2, I also suspect that manufacturers actually charge more than the actual cost difference because more power = better image and customers are ready to pay for that (count me in!).
I think that, in fact, premium manufacturers are those who have the best margins on sales.
But as Wils2, I also suspect that manufacturers actually charge more than the actual cost difference because more power = better image and customers are ready to pay for that (count me in!).
I think that, in fact, premium manufacturers are those who have the best margins on sales.
Margins are usually tightest on entry level models. I don't think (for example) a two litre four is likely to cost significantly more to make than a 1.6 litre four.
I can't believe that an M3 costs BMW anything like twice as much to make as a base model 3-series.
I think this distorts people's expectations where lower volume models are concerned - they look at a mass market car with a big engine and think they are being ripped off for something more niche, yet the profit margin on the former is likely larger.
I can't believe that an M3 costs BMW anything like twice as much to make as a base model 3-series.
I think this distorts people's expectations where lower volume models are concerned - they look at a mass market car with a big engine and think they are being ripped off for something more niche, yet the profit margin on the former is likely larger.
Generally, basic manufacturing principles will also apply.
i.e. for Ford, a 1.25 Zetec is the base model engine as they've been producing it for so long now that the tooling and development is covered by the volume of engines produced. The 1.0 EcoBoost isn't really at that stage, so costs an extra £1400 or so.
I guess there's other mark-ups, perhaps warranty margins and so on.
The long and the short is that a manufacturer will generally sell less 3.0 petrol engines than 1.6 petrol engines, so the production costs would be likely to be much higher. Remember that these are also passed on from component suppliers - i.e. 1000 coil packs ordered from Bosch would result in a higher unit price than 3,000,000.
I think there's a lot more variables involved, but I'd be surprised if the general margin isn't influenced by the above.
i.e. for Ford, a 1.25 Zetec is the base model engine as they've been producing it for so long now that the tooling and development is covered by the volume of engines produced. The 1.0 EcoBoost isn't really at that stage, so costs an extra £1400 or so.
I guess there's other mark-ups, perhaps warranty margins and so on.
The long and the short is that a manufacturer will generally sell less 3.0 petrol engines than 1.6 petrol engines, so the production costs would be likely to be much higher. Remember that these are also passed on from component suppliers - i.e. 1000 coil packs ordered from Bosch would result in a higher unit price than 3,000,000.
I think there's a lot more variables involved, but I'd be surprised if the general margin isn't influenced by the above.
I agree with everyone else.
Volume is a key component. Hence in the US where the V8 was king and volume was high made them relatively cheap to manufacture.
Tooling costs and testing amortised over 3,000,000 units compared to 30,000 units is fairly expensive.
From personal experience, the tooling cost for one component (turbine wheel in a turbo) and its subsequent testing runs up to about £150k. This is just to requalify an existing design but with a new set of tools.
But more displacement (requiring stronger, more expensive, materials) more cylinders extra components and machining all add to the cost too.
It would be interesting to know the full cost breakdown of a Honda 50cc engine (used in significant numbers) and an F1 engine
Mike
Volume is a key component. Hence in the US where the V8 was king and volume was high made them relatively cheap to manufacture.
Tooling costs and testing amortised over 3,000,000 units compared to 30,000 units is fairly expensive.
From personal experience, the tooling cost for one component (turbine wheel in a turbo) and its subsequent testing runs up to about £150k. This is just to requalify an existing design but with a new set of tools.
But more displacement (requiring stronger, more expensive, materials) more cylinders extra components and machining all add to the cost too.
It would be interesting to know the full cost breakdown of a Honda 50cc engine (used in significant numbers) and an F1 engine
Mike
otolith said:
I wouldn't be at all surprised to find that lots of things offered as cost options are very cheap or even cost neutral for manufacturers.
Ensure boring or ugly standard alloy wheel and a few nice optional alternatives. Cost, say, £50 apiece.Upgraded alloys option sold at £1000.
Cost of optional wheels fitted. £200. Saving on standard wheels not fitted. -£200.
Profit: £1000. Good business.
SpeckledJim said:
Ensure boring or ugly standard alloy wheel and a few nice optional alternatives. Cost, say, £50 apiece.
Upgraded alloys option sold at £1000.
Cost of optional wheels fitted. £200. Saving on standard wheels not fitted. -£200.
Profit: £1000. Good business.
Depends on whether they are larger/wide wheels, if so factor in extra tyre costs, potentially higher warranty claims if they are thin walled and thus more susceptible to damage/failure, then government takes a slice..Upgraded alloys option sold at £1000.
Cost of optional wheels fitted. £200. Saving on standard wheels not fitted. -£200.
Profit: £1000. Good business.
Not as simple as you think.
It is in the case of Porsche.
James May had great fun when speccing his 911. Race pack or whatever, but standard steering wheel please. That'll be an extra £200 (IIRC) to not fit the more expensive multifunction wheel - on top of the pack cost which has already paid for it.
As for those special editions that are exactly the same but without Air Con or stereo, yet cost significanty more 'because race car'.
The general public are a marketeer's dream.
James May had great fun when speccing his 911. Race pack or whatever, but standard steering wheel please. That'll be an extra £200 (IIRC) to not fit the more expensive multifunction wheel - on top of the pack cost which has already paid for it.
As for those special editions that are exactly the same but without Air Con or stereo, yet cost significanty more 'because race car'.
The general public are a marketeer's dream.
Well yes, of course - stronger parts, suspension and brakes etc. But the following will affect the price too:-
The dev costs of course.
What the maker thinks you'll pay, of course.
How many fewer higher CO2 models he needs to sell to meet overall EU targets for that manufacturer - if he's selling too many higher CO2 models that are bending his average, he can just put the price up to reduce numbers.
Even making a more powerful model deliberately more expensive to add desirability and aspiration to the range.
For example, the price difference for the 530d over the 520d cannot be justified on true costs IMO, so points 2 & 3 come to mind, if not 4 aswell.
The dev costs of course.
What the maker thinks you'll pay, of course.
How many fewer higher CO2 models he needs to sell to meet overall EU targets for that manufacturer - if he's selling too many higher CO2 models that are bending his average, he can just put the price up to reduce numbers.
Even making a more powerful model deliberately more expensive to add desirability and aspiration to the range.
For example, the price difference for the 530d over the 520d cannot be justified on true costs IMO, so points 2 & 3 come to mind, if not 4 aswell.
Sway said:
It is in the case of Porsche.
James May had great fun when speccing his 911. Race pack or whatever, but standard steering wheel please. That'll be an extra £200 (IIRC) to not fit the more expensive multifunction wheel - on top of the pack cost which has already paid for it.
As for those special editions that are exactly the same but without Air Con or stereo, yet cost significanty more 'because race car'.
The general public are a marketeer's dream.
I engineered an air-con delete once. Custom casting and pulley to replace the AC compressor without re-engineering the entire accessory drive, having to pull an AC compressor off and bin it because it's cheaper than sticking an niche option engine down the production line, validating the FEAD again. Massive pain in the arse to save a few kg that almost no one will have the skill to notice.James May had great fun when speccing his 911. Race pack or whatever, but standard steering wheel please. That'll be an extra £200 (IIRC) to not fit the more expensive multifunction wheel - on top of the pack cost which has already paid for it.
As for those special editions that are exactly the same but without Air Con or stereo, yet cost significanty more 'because race car'.
The general public are a marketeer's dream.
I don't know if it was sold as a cost option or not (I'm not allowed near marketeers in case they get infected with facts and become unable to work) but it definitely cost more if you consider the volume of cars which took up the option, which was tiny (if any).
Weirdly loads of production based race cars have AC, because comfy drivers are faster.
Some options are hugely profitable, but I suspect mechanical ones aren't anything like the money spinner the electronic ones are (like cruise control on any modern car).
Have to say, having 'deleted' an air con unit before on a car I owned, and working in process engineering I was tempted to leave that example out!
Stereo/infotainment stuff however...
(He says trying to convince himself he's still right!)
Could never tell if it was a wind up or what, but an ex boss of mine had a new 5 series as a company car a few years ago. Chappie turned up, and went through the handover, boss asks how he sorts the phone connection out. This was when Bluetooth was a cost option/reasonably rare.
Chappie argues that it wasn't ordered, then under pressure calls the dealer to check the order, where they confirm it was. The car's official spec is that it's not fitted.
No problem says the chap, does something to the loom/circuit board under the armrest, and Bluetooth was suddenly enabled...
Makes sense from the point of view of not having multiple looms etc., especially when the components themselves are bloody cheap.
Stereo/infotainment stuff however...
(He says trying to convince himself he's still right!)
Could never tell if it was a wind up or what, but an ex boss of mine had a new 5 series as a company car a few years ago. Chappie turned up, and went through the handover, boss asks how he sorts the phone connection out. This was when Bluetooth was a cost option/reasonably rare.
Chappie argues that it wasn't ordered, then under pressure calls the dealer to check the order, where they confirm it was. The car's official spec is that it's not fitted.
No problem says the chap, does something to the loom/circuit board under the armrest, and Bluetooth was suddenly enabled...
Makes sense from the point of view of not having multiple looms etc., especially when the components themselves are bloody cheap.
DavidJG said:
Depends.
In your example, a 330 had a 3 litre 6 cylinder, compared to a 320 being a 2 litre 4 cylinder. So much more cost in the larger engine. 330 also had better brakes, different suspension etc to further increase the costs
However, the 320d / 318d share the same engine, clutch, suspension, transmission etc., with the only difference being the state of tune of the engine. In this case, the price differential is also much smaller.
The 318d has a different turbo part number to the 320d (among other things). The 320d (later ones) can push 215+ bhp with remaps alone. The 318d is no where near.In your example, a 330 had a 3 litre 6 cylinder, compared to a 320 being a 2 litre 4 cylinder. So much more cost in the larger engine. 330 also had better brakes, different suspension etc to further increase the costs
However, the 320d / 318d share the same engine, clutch, suspension, transmission etc., with the only difference being the state of tune of the engine. In this case, the price differential is also much smaller.
But yes in principle the block is probably the same, although more changes than you might think.
As above, more powerful engines require much tighter tolerances, more expensive components, etc. However proportionately if building thousands, it isn't that much more expensive generally (within reason).
Absolutely nothing to do with engineering and costs. Quite simply people will pay more for a more powerful car, so manufacturers charge more.
Sometimes it is justified, bigger wheels, brakes, more cylinder etc. Sometimes it isn't. Doesn't matter, people pay more for more powerful cars so manufacturers charge more.
The only time this hasn't happened was back in the nineties when Ford charged exactly the same for an Escort 1.4 or a more powerful Escort 1.6 (because they were the same, just one had bigger cylinder bores and pistons).
Hasn't happened since.
Sometimes it is justified, bigger wheels, brakes, more cylinder etc. Sometimes it isn't. Doesn't matter, people pay more for more powerful cars so manufacturers charge more.
The only time this hasn't happened was back in the nineties when Ford charged exactly the same for an Escort 1.4 or a more powerful Escort 1.6 (because they were the same, just one had bigger cylinder bores and pistons).
Hasn't happened since.
Ari said:
Absolutely nothing to do with engineering and costs. Quite simply people will pay more for a more powerful car, so manufacturers charge more.
Sometimes it is justified, bigger wheels, brakes, more cylinder etc. Sometimes it isn't. Doesn't matter, people pay more for more powerful cars so manufacturers charge more.
The only time this hasn't happened was back in the nineties when Ford charged exactly the same for an Escort 1.4 or a more powerful Escort 1.6 (because they were the same, just one had bigger cylinder bores and pistons).
Hasn't happened since.
Or the 2013 Fiesta, which costs more for the 1.0 with less power (80) than the base model 1.25 engine (82)Sometimes it is justified, bigger wheels, brakes, more cylinder etc. Sometimes it isn't. Doesn't matter, people pay more for more powerful cars so manufacturers charge more.
The only time this hasn't happened was back in the nineties when Ford charged exactly the same for an Escort 1.4 or a more powerful Escort 1.6 (because they were the same, just one had bigger cylinder bores and pistons).
Hasn't happened since.
There's plenty more examples of why you're off the mark, but I can't be bothered to look it up.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff