automationgame.com

Posted: **Fri Oct 10, 2014 9:42 am**

I use this calculation. I think it's close to reality for marketing and warranty cost and R&D expenses.

MSRP = (Total Cost + ( Prod Units * 20 )) * 1.25

Multilply by 1.4 for tax include price.

I based my equation on 325 production units car. So highly P-U cars are most expensive and lower are less.

For comparaison in this table.
Prod Unit = (( 41400 \1.4) -23100) \20 = 325 PU

Posted: **Thu Nov 20, 2014 7:44 am**

Do you have an excell doc or something with an editable equation?

It would be handy to have a tool like this where you just punch in variables and get a magic number.

Posted: **Thu Nov 20, 2014 9:43 am**

See attached...

Posted: **Thu Nov 20, 2014 6:34 pm**

There is one issue with this that many people seem to keep on forgetting. Generally, if the car requires more production units in order to be made, sales are lower. Of course, this is not always the case. If less cars are sold, all the R&D costs (which are an awful lot) have to be spread over more cars and therefore the car becomes more expensive. You could never use this formula with sports cars, super/hypercars, luxury sedans, huge 4x4s etc.

Hope you understand where I am coming from with this

Posted: **Thu Nov 20, 2014 6:57 pm**

I don't really intend to use it - I only made it because someone asked for it .

That said, you could play with the multiplier to compensate for the effect you just described.

Posted: **Tue Nov 25, 2014 2:51 pm**

Cheeseman wrote:There is one issue with this that many people seem to keep on forgetting. Generally, if the car requires more production units in order to be made, sales are lower. Of course, this is not always the case. If less cars are sold, all the R&D costs (which are an awful lot) have to be spread over more cars and therefore the car becomes more expensive. You could never use this formula with sports cars, super/hypercars, luxury sedans, huge 4x4s etc.

Hope you understand where I am coming from with this

I agree. You don't really think a Bugatti Veyron Supersport costs anywhere near the $2,700,000 asking price do you? But, because their "production units" are through the roof, and they only make a handful of cars a year, they have to use a far larger markup in order to stay profitable.

Posted: **Tue Nov 25, 2014 6:27 pm**

It's been said the VW lose $6m on each Veyron they build and it would be impossible to make a profit on any of them directly.

However proving the point that VW could make such a car when others said they couldn't, the huge PR value of being the builders of such a prestige car and the fact that some of the technology will filter down to their other vehicles makes it worthwhile in the eyes of the VW management.

Posted: **Fri Nov 28, 2014 7:36 am**

The Lexus LFA, which has a production limit of 500, is also not profitable for Lexus as far as money is concerned. But they developed so much new things which they can use now for other cars and it's giving the Lexus brand a more sporty touch so that it's worth it.

automationgame.com

My MSRP equation.

My MSRP equation.

Re: My MSRP equation.

Re: My MSRP equation.

Re: My MSRP equation.

Re: My MSRP equation.

Re: My MSRP equation.

Re: My MSRP equation.

Re: My MSRP equation.