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

Original Poster:

3,579 posts

232 months

Wednesday 31st March 2010
quotequote all
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

1,320 posts

210 months

Wednesday 31st March 2010
quotequote all
Entirely depends on development costs and materials.

There is no single answer.

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

amir_j

Original Poster:

3,579 posts

232 months

Wednesday 31st March 2010
quotequote all
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

14,209 posts

259 months

Wednesday 31st March 2010
quotequote all
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

14,668 posts

211 months

Wednesday 31st March 2010
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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

2,070 posts

225 months

Wednesday 31st March 2010
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They must split a lot of development costs with other models. There is so much part sharing, even between competing manufacturers.

Ozzie Osmond

21,189 posts

277 months

Wednesday 31st March 2010
quotequote all
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

8,620 posts

221 months

Wednesday 31st March 2010
quotequote all
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

4,822 posts

258 months

Wednesday 31st March 2010
quotequote all
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?