BMW M3 Forum (E90 E92)

BMW Garage BMW Meets Register Search Today's Posts Mark Forums Read


Go Back   M3Post - BMW M3 Forum > M3 (E90 / E92 / E93) > General M3 Forum (E90 + E92 + E93)
 
Racewerkz Engineering
Post Reply
 
Thread Tools Search this Thread
      03-13-2008, 12:26 PM   #1
M3aHOLIC84
Private First Class
 
M3aHOLIC84's Avatar
 
Drives: 2002 Laguna Seca Blue M3
Join Date: Mar 2008
Location: SoCal

Posts: 170
iTrader: (0)

Production Cost for E92 M3

I'm just curious and wondering if anyone would know or give their best shot at guessing how much it actually costs bmw to build a complete fully loaded M3. Talking about all these prices and mark ups it got me thinking how much profit is bmw actually making on each car sold to the dealer
__________________
2002 Laguna Seca Blue M3
M3aHOLIC84 is offline  
0
Reply With Quote
      03-13-2008, 12:32 PM   #2
par4bmw
Lieutenant
 
par4bmw's Avatar
 
Drives: 370Z & My JK Toy
Join Date: Feb 2008
Location: Scottsdale

Posts: 494
iTrader: (0)

Quote:
Originally Posted by Laszlo View Post
I bet the net profit is a few thousand per unit... GM only makes $786.00 USD net per car sold. That's after everything... including marketing. BTW, did you know GM spends $500,000 a day on marketing? Can you name all of their brands?
In many cases, it is better that you just know the brand and do not associate it with GM.
par4bmw is offline  
0
Reply With Quote
      03-13-2008, 12:33 PM   #3
M3aHOLIC84
Private First Class
 
M3aHOLIC84's Avatar
 
Drives: 2002 Laguna Seca Blue M3
Join Date: Mar 2008
Location: SoCal

Posts: 170
iTrader: (0)

Quote:
Originally Posted by Laszlo View Post
I bet the net profit is a few thousand per unit... GM only makes $786.00 USD net per car sold. That's after everything... including marketing. BTW, did you know GM spends $500,000 a day on marketing? Can you name all of their brands?
off the top of my head...chevy, caddy, gmc, hummer and buick
__________________
2002 Laguna Seca Blue M3
M3aHOLIC84 is offline  
0
Reply With Quote
      03-13-2008, 01:02 PM   #4
par4bmw
Lieutenant
 
par4bmw's Avatar
 
Drives: 370Z & My JK Toy
Join Date: Feb 2008
Location: Scottsdale

Posts: 494
iTrader: (0)

Quote:
Originally Posted by Laszlo View Post
Huh?
Brands such as Saab and Saturn can sometimes do better if people do not directly associate them with GM. Not all people think favorably of GM. If the marketing makes you familiar with Saab, and ties it to a positive image in your mind, then that is all they need to do. I think that the more they tried to make the Saab brand be tightly associated with GM would hurt them.
par4bmw is offline  
0
Reply With Quote
      03-13-2008, 01:04 PM   #5
drvai
Major
 
drvai's Avatar
 
Drives: E92 M3 AW
Join Date: Dec 2007
Location: FL

Posts: 1,264
iTrader: (0)

Quote:
Originally Posted by M3aHOLIC84 View Post
I'm just curious and wondering if anyone would know or give their best shot at guessing how much it actually costs bmw to build a complete fully loaded M3. Talking about all these prices and mark ups it got me thinking how much profit is bmw actually making on each car sold to the dealer
Good question. I guess it really depends on what you mean by production. If you take out research expenses, marketing, etc... Then I'm sure that numbers go down to half the actual price tag (or even less in the case of Europe/south America/Asia).
drvai is offline   United_States
0
Reply With Quote
      03-13-2008, 01:09 PM   #6
drvai
Major
 
drvai's Avatar
 
Drives: E92 M3 AW
Join Date: Dec 2007
Location: FL

Posts: 1,264
iTrader: (0)

Quote:
Originally Posted by Laszlo View Post
I see what your saying. Completely agree. When some BMW owners found out that their autoboxes were GM (lower models) they were very upset. But GM makes some of the best autos in the industry... if not the leader. Hell, Roll Royce used them.

I must admit though, I was a SAAB fan until GM bought them. Haven't looked at them since. GM has a very poor brand image.
Maybe they are not putting enough resources in the details... Interiors are really cheap-looking and the feeling of their cars is years away from european manufacters. (And I'm including cadillac in this statement)
drvai is offline   United_States
0
Reply With Quote
      03-13-2008, 01:11 PM   #7
M3aHOLIC84
Private First Class
 
M3aHOLIC84's Avatar
 
Drives: 2002 Laguna Seca Blue M3
Join Date: Mar 2008
Location: SoCal

Posts: 170
iTrader: (0)

I totally agree...my favorite for example is the GMC denali...and when i look at the interior its a big turn off...everything is made out of cheap plastic...they definitely gotta work on those
__________________
2002 Laguna Seca Blue M3
M3aHOLIC84 is offline  
0
Reply With Quote
      03-13-2008, 01:19 PM   #8
par4bmw
Lieutenant
 
par4bmw's Avatar
 
Drives: 370Z & My JK Toy
Join Date: Feb 2008
Location: Scottsdale

Posts: 494
iTrader: (0)

Sorry for taking the thread off topic with the earlier post.

It would be interesting to know how much they make on an M3. It is always hard to tell whether a company is using a lower production, high-end model as a loss leader to boost overall brand image or if they are obtaining high margin due to the desire of owning the model itself.
par4bmw is offline  
0
Reply With Quote
      03-13-2008, 01:30 PM   #9
M3aHOLIC84
Private First Class
 
M3aHOLIC84's Avatar
 
Drives: 2002 Laguna Seca Blue M3
Join Date: Mar 2008
Location: SoCal

Posts: 170
iTrader: (0)

Quote:
Originally Posted by par4bmw View Post
Sorry for taking the thread off topic with the earlier post.

It would be interesting to know how much they make on an M3. It is always hard to tell whether a company is using a lower production, high-end model as a loss leader to boost overall brand image or if they are obtaining high margin due to the desire of owning the model itself.
its ok...but ya im really interested in finding out how much it costs them to build an m3 at their cost
__________________
2002 Laguna Seca Blue M3
M3aHOLIC84 is offline  
0
Reply With Quote
      03-13-2008, 01:32 PM   #10
swamp2
Lieutenant General
 
swamp2's Avatar
 
Drives: E92 M3
Join Date: Sep 2006
Location: San Diego, CA USA

Posts: 10,201
iTrader: (1)

(Long.... but good I think)

BMW enjoys a pretty high ranking amongst major OEMs in terms of profit. The figures for 2006 was 5.9% margin. Others of interest were:

Porsche - 19.2% (wow, they are ripping us off...)
Toyota - 6.9%
VW - 2.6%

Another recent report has stated Porsche's average profit per car at at an incredible $28,000. This number though is totally inconsistent with the 19.2% figure above. At an $80k average sale 20% is only $16k. I am much more inclined to believe the 19% figure. The same report list BMW at $3,200 per car. This is quite consistent with about 6% of about $50k (estimated average sale price across the models 1er to 7er).

Next we have to understand the profit division. I think the numbers above mean that the profit per car is the profit for BMW Group. Obviously dealers in each region buy low and sell high creating another tier of profit in each region and this figure is then completely on top of the proft for BMW Group. In NA in particular one estimate pegged the BMW NA dealer purchase price for the Coupe at approx. $52.6k that means a hefty ~$5k per M3 per dealer profit. 6% profit margin on something sold a $53k tranlates to an item that costs about $50k.

...Finally to build cost... It is difficult to get build cost precisely even when consulting the BMW annual report. One reasonable estimate of this is that the ratio of BMWs total actual cost of their cars including cost of sales and R&D (but excluding sales and administrative costs, even though those are essential parts of running the company and doing business) divided by total revenues should be roughly the same across it's car lines. This figures for BMW in 2006 was about 82%. So if a Coupe is sold to NA at $53k the 82% figure tell us their actual cost of the car parts, R&D, labor, facilties, etc is then ~$44k. Including all other costs the majority of which are sales and administrative (100%-6%)*$53k = ~$50k as per above.

So these are my two esimates of the "cost" of a base M3 Coupe, $44k excluding S&A costs, $50k including S&A costs. You can use some simple ratios of these numbers if you are interested in the fully optioned case. However do realize that margins are much higher on options than on a base car. I sure would like to hear from an accountant/financial pro or someone who has actually worked in the automotive industry. We had a lot of good discussion from some pros (econimists, etc.) on currency issues on other threads, maybe they will read and chime in. This is a pretty rough/1st pass estimate.

Last edited by swamp2; 03-13-2008 at 02:07 PM.
swamp2 is offline   United_States
0
Reply With Quote
      03-13-2008, 01:44 PM   #11
drvai
Major
 
drvai's Avatar
 
Drives: E92 M3 AW
Join Date: Dec 2007
Location: FL

Posts: 1,264
iTrader: (0)

I thought high end exotics would make more money per car vs high volume companys (Toyota!). Ferrari, Rolls and others must make a lot of money for each car it sells... (guessing. I don't have numbers)

Last edited by drvai; 03-13-2008 at 04:49 PM.
drvai is offline   United_States
0
Reply With Quote
      03-13-2008, 02:10 PM   #12
swamp2
Lieutenant General
 
swamp2's Avatar
 
Drives: E92 M3
Join Date: Sep 2006
Location: San Diego, CA USA

Posts: 10,201
iTrader: (1)

Quote:
Originally Posted by drvai View Post
I thought high end exotics would make more money per car vs high volume companys (Toyota!). Ferrari, Rolls and others must make a lot of money for each car it sells... (guessing. I don't have numbers)
I was doing some real time editing as you quoted me... My post is now more clear and things would overall be less confusing if you removed (or requoted) my quote in your reply. Cheers.
swamp2 is offline   United_States
0
Reply With Quote
      03-13-2008, 04:50 PM   #13
drvai
Major
 
drvai's Avatar
 
Drives: E92 M3 AW
Join Date: Dec 2007
Location: FL

Posts: 1,264
iTrader: (0)

Quote:
Originally Posted by swamp2 View Post
I was doing some real time editing as you quoted me... My post is now more clear and things would overall be less confusing if you removed (or requoted) my quote in your reply. Cheers.
Sorry. I was wondering if you have the ranking with the rest of the figured.

From that 5k that a BMW dealer would make from each M3, how much does it goes to the CA?
drvai is offline   United_States
0
Reply With Quote
      03-13-2008, 08:48 PM   #14
swamp2
Lieutenant General
 
swamp2's Avatar
 
Drives: E92 M3
Join Date: Sep 2006
Location: San Diego, CA USA

Posts: 10,201
iTrader: (1)

Quote:
Originally Posted by drvai View Post
Sorry. I was wondering if you have the ranking with the rest of the figured.

From that 5k that a BMW dealer would make from each M3, how much does it goes to the CA?
No worries, thanks much for the edit!

I don't have a complete margin list by OEM, more info. can be found with google.

I'd guess somewhere in the neighborhood of 10-20% (before taxes of course), not really that much.
swamp2 is offline   United_States
0
Reply With Quote
      03-14-2008, 06:09 AM   #15
mkoesel
Moderator
 
Drives: 2015 SO/CSAT F80 M3
Join Date: Jun 2006
Location: Canton, MI

Posts: 13,743
iTrader: (1)

I would be shocked if the M3 profit margins were anywhere near as low as those of the 335i. M3 invoice is roughly 50% higher than 335i invoice. My guess is that the cost differential is probably closer to 25% though that is admittedly just a gut feeling. Of course its all a bit relative since it depends on how you track the individual monies allocated to product development. I mean for example the M3 V8 probably cost a lot less than the M5 V10, but only because the V10 had to account for developing the engine architecture from scratch.
__________________
A gen-u-ine BMW eff-eight-zero with them tandem clutches in the transmission and that dad gum sun roof on the top-a da cawr.
mkoesel is offline   United_States
0
Reply With Quote
      03-14-2008, 01:40 PM   #16
swamp2
Lieutenant General
 
swamp2's Avatar
 
Drives: E92 M3
Join Date: Sep 2006
Location: San Diego, CA USA

Posts: 10,201
iTrader: (1)

Quote:
Originally Posted by mkoesel View Post
I would be shocked if the M3 profit margins were anywhere near as low as those of the 335i. M3 invoice is roughly 50% higher than 335i invoice. My guess is that the cost differential is probably closer to 25% though that is admittedly just a gut feeling. Of course its all a bit relative since it depends on how you track the individual monies allocated to product development. I mean for example the M3 V8 probably cost a lot less than the M5 V10, but only because the V10 had to account for developing the engine architecture from scratch.
Like I said M brand cars will definitely obtain a higher margin than non M cars. It is more about price that can be charged rather than lower costs. Costs because of much lower volumes (and obviously from higer tech parts) will actually be higher. As I said those effects counter each other.
swamp2 is offline   United_States
0
Reply With Quote
Post Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -5. The time now is 01:13 AM.




m3post
Powered by vBulletin® Version 3.7.0
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST