gt_ltd Posted March 7, 2005 Share Posted March 7, 2005 I guess the total cost (parts + labors + overhead + insurance coverage + pensions + etc.) for Subaru to build a Legacy is about 45% of its MSRP. What do you think? EDIT: thanks timbuktu for the questions. This Space For Rent Link to comment Share on other sites More sharing options...
timbuktu Posted March 7, 2005 Share Posted March 7, 2005 I'm curious how you came to that particular number. Are we building it from the ground up? what do we include in the equation? Raw materials + amount of time to assemble * (avg hourly pay * # of line workers)/avg amount of time each worker spends on installing a component. Do we try to figure out how much each sub-assembly built by other companies cost? Do we also need to factor out their profit margins? Or are you looking at it like subtracting the cost of advertising, pension plan, executive bonuses? Just curious. Link to comment Share on other sites More sharing options...
03Indigo Posted March 7, 2005 Share Posted March 7, 2005 it costs $2.00....I want my $2.00!!!! seriously though, I know there is a fixed value in the cost of each car, all factors considered. The actual materials, labor, overhead, insurance coverage, pensions, etc. The overhead to produce each car before it goes off to the dealer. Can anyone here contact SoA and find out a cost per unit. I doubt they would ever release that type of information to us. But I bet it is a lot lower than we might expect....or then again, I basically have no clue, hehe. Link to comment Share on other sites More sharing options...
gt_ltd Posted March 7, 2005 Author Share Posted March 7, 2005 I'm curious how you came to that particular number. oh a few yrs ago I went to a new year party and the guys there said most things actually cost about 1/2 of their prices to manufacture. the 45% part was just a wild guess to get you guys started... This Space For Rent Link to comment Share on other sites More sharing options...
chucktoo Posted March 7, 2005 Share Posted March 7, 2005 Typically the person who sales most things get 30-50% of sales price that is not true of cars. Depending on the product you markup parts cost to retail from 2-4x . Delaer margins are very slim on base cars . GM for instance has almost $2000 per car in pension costs - each mfg has a different business model . Link to comment Share on other sites More sharing options...
OCDetails Posted March 7, 2005 Share Posted March 7, 2005 Subaru has to make their money somehow. I'm sure it costs less than what we pay, but what do you expect them to do? Operate at a loss? _________________________________________ “Cleanliness becomes more important as godliness becomes more unlikely.” O C D E T A I L S . C O M OCDETAILS BLOG Link to comment Share on other sites More sharing options...
franklin Posted March 7, 2005 Share Posted March 7, 2005 Whats the point of the question? Do you think you overpaid? In the auto area I compair cars to each other and what they cost and either buy or dont. We cant worry about what the "real cost" is to the manuf. In the market place what is the real cost of anything and what are our options? Walk, ride a bike, take the bus? Link to comment Share on other sites More sharing options...
gt_ltd Posted March 7, 2005 Author Share Posted March 7, 2005 Subaru has to make their money somehow. I'm sure it costs less than what we pay, but what do you expect them to do? Operate at a loss? I don't expect them to do anything or operate at a loss. Also, isn't it obvious that any company cannot survive too long w/o making profits? Whats the point of the question? Do you think you overpaid? In the auto area I compair cars to each other and what they cost and either buy or dont. We cant worry about what the "real cost" is to the manuf. In the market place what is the real cost of anything and what are our options? Walk, ride a bike, take the bus? I started this thread expecting it to get some interesting discussions and opinions, instead of "worrying" or finding out if I overpaid or not. It's already been discussed and pointed out that the Legacy is a bargain compared to cars with similar overall value. Thanks for the useful replys. This Space For Rent Link to comment Share on other sites More sharing options...
relhok Posted March 7, 2005 Share Posted March 7, 2005 Don't foget the huge R&D costs to make the first one. That gets paid back before you start to turn a profit. Link to comment Share on other sites More sharing options...
wunderkind Posted March 7, 2005 Share Posted March 7, 2005 also the transportation cost of bringing raw materials and customs too. Link to comment Share on other sites More sharing options...
ih8vtec13 Posted March 7, 2005 Share Posted March 7, 2005 This question will probably not get answered proplerly because subaru won't let it out, but it I would like to know myself. The estamate of 45% sounds good though. Link to comment Share on other sites More sharing options...
SUBE555 Posted March 8, 2005 Share Posted March 8, 2005 An interesting fact most of you probably don't know is the SIA plant at LaFayette is actually Japanese property, that being, the plant is on Japanese soil. That way they don't have to pay duties and such multiple times when components from Japan are shipped in, they only pay the duties once, when the line exits the SIA site. relhok hit the point I was going to mention, R&D is an enormous factor and tooling costs as well. I understand much better how much costs go into tooling after going through the SIA plant, particularly with the B9 line, which is still tooling up for their April 4th production start. There is a lot of work done to the dies to make sure the body panels come out just perfectly, setting up the robotics, making sure all the parts come in at the right point and time, etc, reasons why it costs a lot to tool up, and again with R&D and all of the permutations they try and work on to make sure they provide they put their best foot forward. Link to comment Share on other sites More sharing options...
relhok Posted March 8, 2005 Share Posted March 8, 2005 Maybe someone could find Subaru's profit numbers and unit sales numbers for 2004 and calculate the average profit per vehicle. The Legacy, being a high end model, would likely be more profitable than the average but you might get close to what you're looking for. Link to comment Share on other sites More sharing options...
Plan B Posted March 8, 2005 Share Posted March 8, 2005 Also, Subaru won't really know what their cost per car is until they have finished a run of a particular car. As Seth points out, a lot of costs are in tooling and R&D and these costs will be amortized over the total units sold. Because Subaru doesn"t know how many they will sell they don't know their cost per car until they shut down the assembly line of a particular car. I'm sure they have a target sales number where they merely become profitable as well as a taget sales number where they begin to make some decent coin. The cost ratio of the Baja isn't looking to good but who knows maybe sales will pick up. Link to comment Share on other sites More sharing options...
gt_ltd Posted March 8, 2005 Author Share Posted March 8, 2005 ^^ makes sense. This Space For Rent Link to comment Share on other sites More sharing options...
agctr Posted March 8, 2005 Share Posted March 8, 2005 Unsure what exactly it would be BUT, I have heard that here in Australia they make the FORD Falcon which sells at approx AUD30,000 and costs AUD9000 to make. Also have heard there is only AUD900 worth of steel in the Toyota Camry...... Adam. Link to comment Share on other sites More sharing options...
timbuktu Posted March 9, 2005 Share Posted March 9, 2005 Unsure what exactly it would be BUT, I have heard that here in Australia they make the FORD Falcon which sells at approx AUD30,000 and costs AUD9000 to make. Also have heard there is only AUD900 worth of steel in the Toyota Camry...... Adam. Well, how old is the Ford Falcon? The chassis's pretty old right? Its the same thing with the Panther platform from Ford. It underpins the Crown Vic, Grand Marquis and the Town Car. The stamping for the frame was paid off decades ago, and the sheetmetal only really changes every 5 to 6 years. So, Ford has already paid for the stamping to build the chassis, so that's one thing they don't have to roll into the cost of the platform. So, I'm sure the CV/GM/TC are pretty cheap to build. Link to comment Share on other sites More sharing options...
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