Toyota profit for Prius Gen 3?

Discussion in 'Gen 3 Prius Main Forum' started by mmichaell, Mar 28, 2010.

  1. mmichaell

    mmichaell Member

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    Anyone have any figures on how much a profit the manufacturer (not dealer) makes for each model of the 2010 Prius? Had a coworker mention that Toyota actually loses money when selling the base model(s) of the Prius, so was curious about this. I wouldn't be surprised if this was the case (at least least year before prices rose $400-$800) - Toyota's pricing strategy is pretty clever and wouldn't be surprised if they easily broke even for the III model, and gained profits for the IV and V.
     
  2. Tech_Guy

    Tech_Guy Class Clown

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    Toyota is a huge, well established company. Why in the world would they willingly offer any vehicle at a loss, or just break even? The Prius has been a good selling vehicle for years. Offering a Prius at break even, or less just doesn't make sense....

    The theory that we'll lose a little on everything we make, but we'll make up for it in volume has always been a losing business proposition (unless you are a government entity).

    Keith
     
  3. Paradox

    Paradox Prius Enthusiast / Moderator
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    When the Prius first came out they were loosing or barely breaking even profit-wise considering the technology, but that was many years ago. Now, even with the base 2010, they are not loosing money. Your coworker has bad information...
     
  4. hampdenwireless

    hampdenwireless Active Member

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    These kind of inside figures will probably never been known to the public. The general consensus is that Toyota lost money on the classic Prius (gen1) but has made money on the 2004 and later models. Toyota has spread its hybrid system development costs over so many vehicles (more than anyone else by a factor of 2x) yet the iconic Prius would have paid for the development early in its life.
     
  5. wvgasguy

    wvgasguy New Member

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    General Motors did that for years
     
  6. JimN

    JimN Let the games begin!

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    Does your coworker have any documentation? If not, why do you believe him? Toyota hasn't sold any Prius at a loss ever. Since I mentioned it, I am as credible as your coworker. Nobody on the outside has any solid numbers on the Prius and Toyota will never release them.
     
  7. EZW1

    EZW1 Active Member

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    In any manufacturing business, price structure is established (depending on supply/demand, of course) that a profit margin of 10% to 20% is realized. So, working backwards, one might be able to presume the following:
    Sale price: $22,800
    Dealer incenctives: $1700
    Misc Costs: $1900
    Profit margin: 15%
    Cost to manufacture: approx $16000

    These numbers are highly speculative, but I feel not far from reality given standard business practices.
     
  8. Skoorbmax

    Skoorbmax Senior Member

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    It could be a loss leader but more likely they just make something modest and then their margins are much higher no the other models. I actually can barely believe that people pay as much as $7k extra to go from a base II to the V. Seems like money in the pisser to me for what you get for the extra cash.
     
  9. hsiaolc

    hsiaolc New Member

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    Making a loss with Prius 3? Joking right? They are laughing their way to the bank. They don't get to world No.1 for playing nice.
    The car is made out of the cheapest material they can possibliy find. If you look very closely at the car and how much they tried to cut cost you will think twice about how much this car really worth.

    The sunglasses holder they dont' even bother to put some felt in it so it will not rattle. how much is felt to them? Nothing but they don't even want to put that in. What about the glove comparments? No felt in it either just hard plastic so you can't put anything in it without making a sound. How much is putting some felt in them? 10 cents? Lets make it 1 dollar, but yet they don't want to do that either.

    Oh and the cloth for the seats. Have you really seen them once they are off. Terrible low cost cloth seats and they thought they are being clever by making it look like suede. Ohter car maker gives much better high tech cloth seats such as Audi and even Honda.

    So yeah their cost to make the car probably is less than 5k.
     
  10. vegasjetskier

    vegasjetskier New Member

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    :pound:
     
  11. Tech_Guy

    Tech_Guy Class Clown

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    Look at it this way.. Making an automobile (and all of its' components) is a labor intensive endeavor. If Toyota had to pay Detroit automotive labor costs, then it would be a money losing proposition at the current asking sales price.

    Keith
     
  12. usbseawolf2000

    usbseawolf2000 HSD PhD

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    3 people like this.
  13. mmichaell

    mmichaell Member

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    Actually I don't necessarily believe or not believe him. I am asking if PC has anyone that has more inside info into this. My personal interest in this is that I am always interested in how companies market and sell their vehicles, and what their strategy is with regards to product lines and profit margins. For example, a Prius II, with what quality and technology it affords, seems to be quite a steal at invoice price @ $20,900.00 - think about it, you are getting a car with better gas mileage than any other production car out there, and its only slightly more than the price of a Honda Civic. Thats why I wouldn't be surprising if the Prius II is more of a "break-even" car for Toyota. But I am no expert.
     
  14. mmichaell

    mmichaell Member

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    That would be a decent profit then. I am inclined to think that they make less on the lower models though. For example a III is $1000 more than a II. I'm pretty darn sure the difference between a II and III (upgraded speakers, integrated bluetooth, and cd changer) doesn't cost Toyota $1000. They must make at least $600 additional pure profit from a II -> III I would think.
     
  15. usbseawolf2000

    usbseawolf2000 HSD PhD

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    First year redesigned model (2010) will make less profit compared to 2015 model.
     
  16. hampdenwireless

    hampdenwireless Active Member

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    Now that is highly unlikely. The original Japanese only Prius was almost certainly sold at a loss. Maybe even originally (but not for long) at a per unit loss, IE the car cost more to build (including labor) then the selling price. This happens often to manufacturers on new products as the assembly line is running slower (and therefore labor costs per unit are higher).
     
  17. georgew

    georgew New Member

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    pretty sure he was being sarcastic.
     
  18. Skoorbmax

    Skoorbmax Senior Member

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    Seconded :rockon:

    Felt is cheap. It may not be added because it may not wear well. My 2000 Maxima has no felt in the glove compartment or sunglass holder. I didn't check my other vehicle. The Prius' sunglass holder is small but does hold a single pair. My van's holder takes two, though :)

    I would guess actual cost for a Prius II, assuming invoice is at, say, $22500, is ~$20,000. Not exactly sure, though, the margin probably is fairly modest. I am having a very hard time finding online with major brands what their actual cost is. I found some buffoon who said a $20k car costs about $2k, the rest being markup :rolleyes:

    EDIT: Now I see that $3100 above the numbers seem to gel with my best guess.
     
  19. KenzoTH

    KenzoTH Member

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    Business is profit, and Toyota is big business.
     
  20. hill

    hill High Fiber Member

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    Probably Art Spinella. Just when you think no one else will buy into that sorry huxter, you find someone like the guy's friend above.

    :rolleyes:

    .
     
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