Honda, Toyota make $3,100 profit on each hybrid sold

No but they are protected by many government agencies. That's our tax dollars working for the noble worker.

 

Yes, but no amount of government regulations will make incompetent management smart. Unions don't solve that problem, but the union most definitely did not cause downfalls resulting from bad management.

 

Are you thinking of the Ford plant? It started by cranking out the Model T, and was a very huge facility

 

Employers, or employees? I think we're starting to confuse the two.

I personally am glad we have outfits like OSHA around. Speaking from a chemical background, I'm also *very* glad we have standards, such as TLV's (Threshold Limit Value) on occupational chemical exposure

The neat thing about TLV's, when you contrast them over the past 20 years, they have gone DOWN, not up. I guess lifetime weighted exposure to chemicals really isn't a good thing

 

My dealer told me they make less than 10% on the Prius. But they can pad that some if you are trading.

 

Trim -------- MSRP ------- Invoice ------- Holdback ------ Profit ----- %
II ---------- $22000 ------- $20900 -------- $440 --------- $1540 ----- 7%
III --------- $23000 ------- $21411 -------- $460 --------- $2049 ----- 8.9%
IV --------- $25800 ------- $24017 -------- $516 --------- $2299 ----- 8.9%
V ---------- $27270 ------- $25384 -------- $545 --------- $2431 ----- 8.9%
V loaded -- $34510 ------- $31593 -------- $545 --------- $3462 ----- 10%

Unless Toyota is offering some special incentive he is telling the truth. They make their money by giving you a very low price for your trade-in which is why you should never trade a car but instead sell it privately. (Exception is if it is is REALLY poor shape and the dealership is offering a "push-pull-drag" price)

 

Per George Will on "This Week" (a Sunday morning news show) today, Toyota loses money on the Prius in discussion about American car companies. He did not cite any sources to support it. Sounds like Mr. Will has old info.

 

Geez Shawn, tell us how you *really* feel.

j/k. I actually agree with you 98%. None of my stock portfolio is from corporate America.

 

well thats how it works though - thats the margins dealers get for selling cars... from 7-12% usually depending on million factors. those are decent margins if you can sell car without giving discounts..

 

now, problems for dealers right now is not just drop in sales, but the fact that nobody isnt making any money on the cars right now, and in some cases you are losing money on them.

so is not as if your profits went down by 30-40% and thats it... there are no profits in selling new vehicles these days and your revenue goes down by 40% which means that it will be so much harder to refinance or get new business loans for you... very bad situation for even the best dealers.

 

Yes these numbers are mighty accurate.

In general Toyota and Honda make about 8% on most vehicles if they sell them at full MSRP ( this is rare ). In general GM, Ford, C make about 15% on each vehicle if these are sold at full MSRP ( this is even rarer yet ).

Toyota and Honda want their dealers to work harder and to turn turn inventory quicker so that the stores order more units quicker thus keeping the factories fuller.

Here is an interesting scenario that plays out daily in thousands of cities across the nation ( pre-financial collapse ).

Corolla $18000 vs Tahoe $44000.. which makes more money?
Relevant data: Interest cost is 8% pa.
The Corolla makes $1000 for the T-dealer and moves off the lot in 20 days.
The Tahoe makes $2000 for the C-dealer and moves off the lot in 180 days.

In the course of a year the T-dealer will buy and sell 18 Corolla units and make $18000 in total profit. The interest cost of each one will be about $80. For all 18 units that cost will be ~$1400. NET PROFIT: ~$16500

In the course of a year the C-dealer will buy and sell 2 Tahoe units and make $4000 in total profit. The interest cost of each one will be about $1700. For both units that cost will be ~$3400. NET PROFIT: ~$500

Which business would you rather own?

 

JSH, nice guesses on the #'s but there hasn't been that much margin on Prii in a while. The current pkg#6 has about 5.5% + holdback, & if history is any indicator the 2010 margins will be even lower.

 

The numbers I quoted are from Edmunds.com.

 

Are you a member of a club Texas911? Who pays your membership dues? You do? Well what do you know, union members pay their own union dues too!! Car manufacturers pay reasonable and fair wages because unions have the power to get them to. If they didn't there would be even more working poor in the USA than there are now. Cars wouldn't be any cheaper, but execs pay packets would be fatter.

I'm happy Toyota makes a profit, it means they will be around tomorrow. GM don't make a profit, government assistance will keep them around tomorrow.

 

The difference between the MSRP and the invoice is what the dealer makes; not what Toyota makes. Toyota sells the car to the dealer for the invoice price. Toyota's profit is the invoice minus the actual cost to make the car. For example, if they sell the car to the dealer (invoice) for $20,900, and it costs Toyota $19,000 to actually make the car, then Toyota's profit is $1,900. In the situation where holdback is paid to the dealer (an incentive for the dealer to sell the car quickly), then Toyota would pay the dealer the $440 additional, and Toyota's profit would then be $1,460.

I'm assuming you already know that, and somehow I just simply misunderstood what you were saying.
.

 

Yep I should have typed 'Toyota and Honda dealers make ~8% at MSRP'. Toyota makes whatever it makes when it invoices the dealer.

 

The heck with their profit margins on the new car sales. So they make $2K a car, what is their monthly overhead at the dealership? Most dealers make 120-125% of their operating costs in the parts and service departments.

What most of you don't realize is these Priuses are a nightmare for any Toyota dealers service and parts department. Do you think that $50 on average that they make in profit servicing your car each year is going to pay the bills?

Lets see
1. Oil Change every 5,000 miles.
2. Rotate tires every 5,000 miles.
3. Three air filters (Owner can change out him/herself)
4. Three cabin air filters (Owner can change out him/herself)
5. Maybe a set of brakes and rotors at 70-80K miles.

Gee they're going to become so wealthy servicing your 2010 Prius over the next eight to ten years or 100,000 miles.

 

That's OK, we're making out like bandits at the pump. <GRINS> We can afford it.

Bob Wilson

 

That may seem like a big profit for one car but it is not out of line with industry standards. Manufacturers of products typically build-in a profit margin of around 10%. If it is much higher, they may open themselves to racketering or price-fixing lawsuits. If it is much lower, growth will be slower.

Keep in mind that automakers spend billions on develpment of a single auto. They spread their development costs over period of time, typically 5 to 10 years, and that dictates the final sales price.

I don't think a $3100 profit margin is out of line at all.

 

HV battery pack is proving to be very reliable. The cost to replace it under warranty has to be built into the price of the Prius. Not having to replace it under warranty has to increase more profit for Toyota.