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Actual Bronco Costs to build???

fzracer484

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Starting a discussion on a different topic related to pricing.

My thoughts: Invoice pricing on vehicles is something the automotive sales community have managed to make mainstream and has very little to do with actual production costs. I believe that my $28,500 bronco actually costs closer to 15k to build than the invoice listing. I think a 4D 60k Bronco probably costs about half that to actually produce. I'm not sure why people think invoice pricing is what the dealer is actually paying, or anything close to it. If you purchase anything wholesale you basically are looking at 30 -50 % of Retail costs and that goes for most everything. If you're buying a $2,000 computer from BEST BUY they paid about $750 for that computer. As the retail price goes up, the expected margin of profit % generally does as well.

Don't we realize that some of the owners of these dealerships are some of the wealthiest people in any given area, so why do even us car enthusiasts play this game with "invoice" pricing. Do we really think that the dealership is actually paying these invoice prices? They are making so much damn money it isn't even funny!!!! It's just the "we can't lose money on this car" type of statements that make me laugh. I mean they have marble floors in the showroom and they say they are in the poor house.

So what are your thoughts on this, especially if you're a small business owner and pay wholesale prices for things?

So what do you think MOST dealers are paying for a typical Bronco in either % or $$ calculations?

My example: MSRP $28,500 My thoughts on cost to Ford - $12,000 - $15,000 My estimated dealer cost is about $22,000 - $24,000
leaving an expected profit margin of about 5k per vehicle sold.
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PWillette

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My uneducated guess is it costs Ford 50% of MSRP to produce.
 

shoelessjoe

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Starting a discussion on a different topic related to pricing.

My thoughts: Invoice pricing on vehicles is something the automotive sales community have managed to make mainstream and has very little to do with actual production costs. I believe that my $28,500 bronco actually costs closer to 15k to build than the invoice listing. I think a 4D 60k Bronco probably costs about half that to actually produce. I'm not sure why people think invoice pricing is what the dealer is actually paying, or anything close to it. If you purchase anything wholesale you basically are looking at 30 -50 % of Retail costs and that goes for most everything. If you're buying a $2,000 computer from BEST BUY they paid about $750 for that computer. As the retail price goes up, the expected margin of profit % generally does as well.

Don't we realize that some of the owners of these dealerships are some of the wealthiest people in any given area, so why do even us car enthusiasts play this game with "invoice" pricing. Do we really think that the dealership is actually paying these invoice prices? They are making so much damn money it isn't even funny!!!! It's just the "we can't lose money on this car" type of statements that make me laugh. I mean they have marble floors in the showroom and they say they are in the poor house.

So what are your thoughts on this, especially if you're a small business owner and pay wholesale prices for things?

So what do you think MOST dealers are paying for a typical Bronco in either % or $$ calculations?

My example: MSRP $28,500 My thoughts on cost to Ford - $12,000 - $15,000 My estimated dealer cost is about $22,000 - $24,000
leaving an expected profit margin of about 5k per vehicle sold.
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Naters317

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Kos

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As my Marketing Professor when I got my MBA would always reinforce, manufacturing/production costs has nothing to do with sales price. Sales price is exclusively a function of the market. If sales price is less than production cost, then producers will leave the market until sales price goes up.

Simply bringing up production costs in a sales price discussion would take points off our grade.

Also, as you mention dealership owners are some of the richest people in town, if the owner puts $100 per vehicle in their pocket and they sell 1,000 vehicles a year, thats $100K in income. You do that across 3 or 4 locations, you have a very wealthy individual.
 

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ocbucks1

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As my Marketing Professor when I got my MBA would always reinforce, manufacturing/production costs has nothing to do with sales price. Sales price is exclusively a function of the market. If sales price is less than production cost, then producers will leave the market until sales price goes up.

Simply bringing up production costs in a sales price discussion would take points off our grade.

Also, as you mention dealership owners are some of the richest people in town, if the owner puts $100 per vehicle in their pocket and they sell 1,000 vehicles a year, thats $100K in income. You do that across 3 or 4 locations, you have a very wealthy individual.
Direct casts are a lot different. You need to consider Overhead, engineering taxes labor etc etc. Car business after expense margins are typically 5%. Not a business with big margins.
 

iwantabasebronco

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My uneducated guess is it costs Ford 50% of MSRP to produce.
No way they make 50% margins. A quick google says the industry ranges from 10-20% margins roughly. My guess is ford is no exception, and probably on the lower end of that range for the Bronco given the youth of the product and the cost it probably took to get to scale. Margins should get better over time as they learn more and become more efficient.
That’s my $0.02

correction: that 10-20 range is for high end vehicles. So even lower than that…
 

Seatmandan

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What is the point of this thread? to dissect the publicly traded auto company's business model/profit margins? What value-add does that give to the general consumer? nothing.
Last I checked, Ford stock (F) is always for sale to buy.
 

Kos

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Direct casts are a lot different. You need to consider Overhead, engineering taxes labor etc etc. Car business after expense margins are typically 5%. Not a business with big margins.
Agreed
 

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fzracer484

fzracer484

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First settle down a little, this isn't shit stirring, it's bringing a topic up for discussion, and my data points are using my experience in seeing wholesale pricing for several other industries including the computer business. I have access to wholesale information for some things, but have never seen wholesale numbers for a dealership. have you?

some of you seem a bit cranky, maybe cause you haven't received your bronco yet. If you have nothing to add to the thread, don't reply and save yourself the grief!

WOW- Do you do this 'no real data used, just stirring up s**t' for EVERYTHING that you buy?
 

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Ask all the experts here. A Bronco has .53 cents in material and $83.67 in labor costs. The rest is just pure profit for ford. Oh and the engineers got (insert nonsense small item) wrong.
 

StyleGuy

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A while back someone was posting that was purchasing through the military car buying service. They said the website they used had a ton of info including true dealer cost. I think it was 7-8k below invoice on a midlevel Bronco. So the dealerships are still making profit on invoice deals.

Several of my neighbors are car dealers. Ford, Chevrolet, Mercedes etc. Basically all brands, huge auto groups. But the most wealthy dealer owns buy here pay here lots and few people even know who he is because his name isn't on buildings and commercials non stop.
 
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fzracer484

fzracer484

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Not sure what your reply even means. The point of this thread is to allow some of us to discuss what we believe the true build cost to be for our trucks. Not sure why your panties are in a bunch. Some members on this forum sure are on edge these days

What is the point of this thread? to dissect the publicly traded auto company's business model/profit margins? What value-add does that give to the general consumer? nothing.
Last I checked, Ford stock (F) is always for sale to buy.
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