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Actual Bronco Costs to build???

Lugerdog

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It's a succesful business. I hope they make double. I sell expensive boats. 10-30x's what the average Bronco retails for. The car business is tough. Sure, they make $ but shouldn't everyone? As long as my dealer treats me good I will stay local. Nickle and diming dealers is a tired argument. If everyone took a step back and looked at the markups on cabinets, food, apparel, new houses, etc... Basically everything we buy. The markup when it comes to dealerships is not as big as people think. Ford makes a ton more that dealers on average. If I owned a dealership I would feel blessed. I don't understand the hate. I love when people make $. It makes the world go round
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fzracer484

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Want to be clear that this isn't a hate post, it simply is a topic of discussion.

It's a succesful business. I hope they make double. I sell expensive boats. 10-30x's what the average Bronco retails for. The car business is tough. Sure, they make $ but shouldn't everyone? As long as my dealer treats me good I will stay local. Nickle and diming dealers is a tired argument. If everyone took a step back and looked at the markups on cabinets, food, apparel, new houses, etc... Basically everything we buy. The markup when it comes to dealerships is not as big as people think. Ford makes a ton more that dealers on average. If I owned a dealership I would feel blessed. I don't understand the hate. I love when people make $. It makes the world go round
 

Daktari

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If everyone took a step back and looked at the markups on cabinets, food, apparel, new houses, etc... Basically everything we buy.
Starbucks is one of my favorites there, a cup of hot water with a bit of mediocre coffee grounds, ridiculous markup, but people buy it and then complain about gas prices that have massive billion $ operations behind them to even make the product. Clothing is an other, especially "high end" like the $100 white t-shirt I saw at Nordstroms, LOL.

I sure hope my dealer made good money, even after going below MSRP for reasons not clear to me, I want them to be around so I don't have to drive to the next town for service. Can walk home from mine. Overhead must be pretty massive for a dealer, lot/building/insurance all very expensive here.

It would be interesting to know exactly how much my Bronco cost Ford to build, just out of curiosity, but we'll never know. I highly doubt the margins are anywhere near computers/phones/TVs etc. Chips and plastic.
 

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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.
A vehicle is not a cookie cutter wholesale consumer widget. From your example, you left out the billions needed for research, development, engineering and facilities.

Sure in your example, maybe it's $15K to pay for the raw and finished materials along with the production labor to produce each base trim, but there would be nothing to produce if there was no research, development, engineering and facilities costs up front. So take the billions spent each year on that and then amortize it across each vehicle produced and you will come closer to the answer.
 

HBTFD

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I used to work for Ford. Here are some directional numbers -

An Msrp $20000 vehicle cost Ford about $10000 in parts, labor and plant costs to build. $1000 for a body, $200 to paint/seal it the rest was powertrain, interior, etc. The rest of the costs were from design and marketing. The stretch target margin for the company was 5%, on a good year they made 3%.
 

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Caseoftexas

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Dealer profits are a lot more complex than you are getting at in this thread. I am in the industrial supply business and the company I work for keeps about $8mm in inventory on hand. That’s product we buy and sell and in turn we make healthy margins (20-40% usually). Dealers on the other hand use floorplanning to finance the vehicles on their lot through the manufacturer. So a typical independent dealership owner doesn’t have the millions and millions of dollars in vehicle inventory. In turn, their profit margins are lower than other types of businesses.
You’re not entirely wrong though, that dealers make more than the difference between invoice and MSRP. Dealers also get a lot of different incentives based on certain factors. They get marketing incentives, they can get bonuses for sales volume, they get incentives for those customer satisfaction surveys they send out when you buy a new car, they can even get facilities incentives like Ford offered dealers for setting up Bronco showrooms.
I bought an F150 for our company from a dealer 4 hours away a long time ago that was like 3k under MSRP on a 20k work truck. A small town dealer nearby had the same truck and couldn’t do any less than MSRP. The difference was the other dealership was nearing a volume bonus at the end of the month so they were willing to sell below their cost to get that bonus.

This American Life did a special a long time ago that explained a lot about how dealers make their money. Recommend you check that out.
 

UpNover

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That cost to manufacture may be close, but you must also take into account all the years of R&D that goes into the final production along with warranty cost.
I worked for Dealerships 28 years and the Dealers don’t make as much as you would think on actual sale , they make their money on Financing and marking up your loan buy rate, that’s the reason they hate cash buyers. Example Bank approves you at 2.9% (loan buy rate) and tells dealer they can participate up to say 2% ( just example) so dealer charges you 4.9 % interest on your loan, they make 2% every month off your note and the longer they stretch your payments the more they make and don’t forget about extended warranties.
 

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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.
Sure, if “most everything” means “some stuff” (but actually not that much and nothing with the complexity of electronics or automobiles)…

Best Buy certainly didn’t buy your $2,000 MacBook Pro for $750, I can tell you that much. Just like they didn’t buy all the $1000 Galaxy S21s they have for $400. Nor did they buy any $500 PS5s for $200.

So much of your post is flat wrong it’s hard to even respond to.
 
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fzracer484

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But yet here you are responding with nothing to add whatsoever to the conversation. So smarty pants, what do you think they actually pay for the items listed. I'm just going by wholesale numbers on a sheet I see . Are you saying the numbers are actually less or more? enlighten oh great one!

Sure, if “most everything” means “some stuff”

Best Buy certainly didn’t buy your $2,000 MacBook Pro for $750, I can tell you that much. Just like they didn’t buy all the $1000 Galaxy S21s they have for $400. Nor did they buy any $500 PS5s for $200.

So much of your post is flat wrong it’s hard to even respond to.
 

ramblinwreck

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Well, if you go to the parts counter and just buy all the parts needed to assemble your own Bronco, it will costs you about $262,000 to build a base 2 door. Plus labor of course.
 

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But yet here you are responding with nothing to add whatsoever to the conversation. So smarty pants, what do you think they actually pay for the items listed. I'm just going by wholesale numbers on a sheet I see . Are you saying the numbers are actually less or more? enlighten oh great one!
Wholesales prices for what and on what sheet?
 

66GT

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Well, if you go to the parts counter and just buy all the parts needed to assemble your own Bronco, it will costs you about $262,000 to build a base 2 door. Plus labor of course.
I'm building mine from RockAuto. Only $114,000 in parts (and another $173,000 in shipping). đź‘Ť
 
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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.
You should build a car factory and let us know how much it costs you to build a car. $2000-$3000 of every car built in the USA goes to union benefits.
 
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fzracer484

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Why are some of you guys so childish? you go do you buddy and rail against those unions! lol


You should build a car factory and let us know how much it costs you to build a car. $2000-$3000 of every car built in the USA goes to union benefits.
 

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Many dealers use the old excuse "If we sold at invoice we would be losing money". What a crock of chit!!! If that were the case dealers selling at invoice for years would have already gone under.

There are so many other variables that determine how much a dealer makes on each vehicle sold. Some we as educated buyers know about. And some only people in the industry know.
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