Guess how much money Ford makes on each Explorer...

[Bryce]

An article in the USA Today:

"The Explorer isn't just any Ford vehicle. It's one of Ford's hottest numbers. It is the top-selling sport-utility vehicle in the world. Each Explorer out the door represents more than $10,000 in gross profit and $4000 in operating profit to Ford. And as much as 20% of corporate profits."

Ford has sold 3.76 million Explorers. Thats alot of moolah.

 

[jimbo74]

if they get $14000 for an explorer why do the brand new ones cost $34000 for a fully loaded one? that is over 100% markup

 

[JDraper]

'Cause dummies like us are willing to pay for them.

 

[Bryce]

I think it means 10,000 total, including 4000 for operating profit (whatever that is.)

Go ahead, read the article. Money section, Thursday, March 29.

 

[jimbo74]

i live in california, our papers are different!

 

[Pemerling]

yeah but u gotta remember that ford has to pay its thousands of workers as well as put money into clean air funds as well as hundreds of other things that they are required to put money into. after all is said and done i bet they arent making that much. i mean explorer is the best selling suv so im sure they arent hurting for money

 

[IgotTwo]

With so many new SUV's coming out, your would think the price would?........... I don't even want to say it .

I heard the real profit takers are those "vowel" cars!

 

[aldive]

Originally posted by jimabena74
if they get $14000 for an explorer why do the brand new ones cost $34000 for a fully loaded one? that is over 100% markup

Have you ever been in any type of retail? Most retail items are priced similary.

Do you know what it costs to make a manufacturing plant? In real estate, construction costs, rtc. There are operating expences in running a planr, eg, electricity. There are Union workers who get the big bucks. What about insurance? Advertizing?

 

[Cameron]

I remember reading some time ago that trucks offer the largest profit margin for not only the manufactures but the dealers as well. Look at the price of a full sized conversion van! It’s very inexpensive and you get loads of cool stuff. They just don’t sell as well.

Go figure!

Anyways, the price is set at whatever the market will bare. Yeah capitalism.

 

[Jon98sohc]

WHAT ABOUT THE EXTRAS !!

I don't know about all of you but what I paid for my Explorer was the cheap part of the deal. Ford made twice that on service visits and parts. Well that might be an exageration I have not added it up but I know some of you know what I am talking about.

 

[donkey boy]

But ...

... if you are a supplier for Ford (or any other car manufacturer), you need to lower prices substantially every year. The volumes are very interesting, but prices really s*çk!

 

[aldive]

Re: But ...

We all HATE to pay a lot for a vehicle; my Explorer cost more than my first home! A scary thought.

But before we brand Ford et al. as robber barons, we must understand that they are in business to make money. PROFIT is not a dirty word.

For those of you who work for someone else, imagine what would happen to your paycheck and benefit package IF the company didn't make a PROFIT on whatever it died. For us self-employed folks, we know all too well what happens with no PROFIT.

Free enterprise is one of the things that make America the land of opportunity.

 

[IgotTwo]

If it was only that easy

 

[Stephen]

Trust me guys, the profit margin is the same or larger on a lot of other vehicles, especially SUVs. The Lexus LS430 I ordered MSRP's at $69,800 and the cost is about $48,000. Thats a $20,000 profit per vehicle.

 

[aldive]

Originally posted by Stephen
Trust me guys, the profit margin is the same or larger on a lot of other vehicles, especially SUVs. The Lexus LS430 I ordered MSRP's at $69,800 and the cost is about $48,000. Thats a $20,000 profit per vehicle.

Don't think for a single minute that Lexus "keeps" this $20k. Thats what is called GROSS PROFIT. Substract all expenses and what is left over is called NET PROFT, that is the important number.

 

[Stephen]

Precisely, same with the $10,000 per Explorer. Thats gross profit also.

 

[rpenner54]

Good for Ford!!! I am so glad they are making money off of all these vehicles. What would happen if they couldn't make that sort of money? Economic slow down? You bet! Man I wish I was in a market where I could sell a sloppy product and make out GOOD on the end deal like that. I guess I am a big fan of any kind of business so I don't ever think its bad for anyone to make money. If you don't like the fact Ford makes that much on each Explorer, well no one told you to buy one did they? You didn't have to buy a new one right? Hey its all fair game! As far as price markups go you bet your little butt that the majority of most businesses practice a 100% markup UNLESS they don't sell the parts/products for profit and sell it for service. Which Ford is also doing so wooohoo to them! Who says you have to go to the Ford Dealer for anytype of a service? You don't! Heck you could do it all yourself it just gets expensive.

Ahhh off my soap box.

 

[aldive]

As far as price markups go you bet your little butt that the majority of most businesses practice a 100% markup UNLESS they don't sell the parts/products for profit and sell it for service. [/B]

Want to venture a guess what the profit margin ins in the grocery business? The gasoline business?

 

[IgotTwo]

I was an auditor for a long time and was exposed to many different industry "stats." Athough Ford's numbers make your eyes open wide, there are a lot of complex business and accounting issues. As always, context is very important. I'm sure everyones has hear the expression "how to lie with statistics."

The one that makes me stratch my head is BOTTLED WATER! That stuff is 2-3 times more expensive than gasoline!

I hope Exxon doesn't start thinking about that one too hard.

Why go through all that trouble with big drilling rigs, refining, distibution and tanker captians with half a load on. A couple of guys with a garden hose and some plastic bottles would make their lives much simplier.
"Of course... we make it in France"

Who would be driving Explorers then!

 

[aldive]

Originally posted by IgotTwo

The one that makes me stratch my head is BOTTLED WATER! That stuff is 2-3 times more expensive than gasoline!

I hope Exxon doesn't start thinking about that one too hard.

What do you think the PROFIT MARGIN of this bottled water is? What a product sells ( RETAILS ) for is not its MARGIN.