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Cost of an Audi

C

Colin Barron

pfm Member
A Nissan Micra cost £2000 to build in Sunderland. I can see how more upmarket cars cost more to build, a bit more material, a more expensive engine, a few more toys, but how do they increase this to £80,000 for an Audi and more for essentially mass produced motors.
 
Colin Barron said:
A Nissan Micra cost £2000 to build in Sunderland. I can see how more upmarket cars cost more to build, a bit more material, a more expensive engine, a few more toys, but how do they increase this to £80,000 for an Audi and more for essentially mass produced motors.
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You are comparing different things, pure manufacturing cost vs selling price. The manufacturing cost does not factor in R&D, business costs, marketing, distribution, cost of delivering products to market, profit etc.

Also, businesses balance costs across many products so if you want to compete in a low-cost market area you need to have a thinner margin which you then subsidise with products that are less price sensitive. The best value Micra will be the base spec £7999 whereas the £12k version with a few options will be much more profitable to Nissan as the extras will only add a few hundred to the build cost but the selling price is £4k more.
 
Also, especially in highly complex products the selling price does not usually directly reflect the costs of making it but the price the market will stand.
 
This seems like a remarkably odd question to ask for someone who posts on a high end audio forum.
 
I think the biggest cost of driving an Audi might be the assumptions other drivers make about you. ;) (They do seem to be disproportionately driven by aggressive self important types)

Otherwise, as others have said - it's what the market will bear, which is apparently a LOT. Nice looking cars though.
 
cutting42 said:
You are comparing different things, pure manufacturing cost vs selling price. The manufacturing cost does not factor in R&D, business costs, marketing, distribution, cost of delivering products to market, profit etc.

Also, businesses balance costs across many products so if you want to compete in a low-cost market area you need to have a thinner margin which you then subsidise with products that are less price sensitive. The best value Micra will be the base spec £7999 whereas the £12k version with a few options will be much more profitable to Nissan as the extras will only add a few hundred to the build cost but the selling price is £4k more.
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I think it was around 1983 when a friend who worked for Ford said the difference in manufacturing cost between a 1.6 litre L and an XR3 was £50, the market prices at the time were £4200 and £6500 respectively.
 
Colin Barron said:
I think it was around 1983 when a friend who worked for Ford said the difference in manufacturing cost between a 1.6 litre L and an XR3 was £50, the market prices at the time were £4200 and £6500 respectively.
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There you go !

My company makes expensive very high technology equipment costing up to half a million quid or so a pop. I also know how much it costs us to make them (the most expensive made in Manchester btw) and the difference is considerable but the cost of delivering those instruments to the marketplace in a professional manner is much higher than the manufacturing cost. We do not make exorbitant profits either. Interesting topic really and one I have only started to understand during the past 10 years or so in my current role.
 
With Mercedes it's that lavatories in the showrooms.

I was let in one once when I was looking at a Smart Roadster and the Smart one wasn't working.

It was like a palace with a concierge.

Stephen
 
The audi is a skoda tarted up so the mark up is high fuelled by marketing hype and th fact they make the audi look better !
 
I don't see many old Skodas around, or Seats. Plenty of old Audis and VWs though, even using man-maths to work out different levels of sales over the years.

And yes, all current Skodas are, to me, munters. No thanks.
 
General rule for mass market electronics is shop price is three or four times manufacturing cost, so that seems about right, boutique hi-fi starts at about five or six and continues upwards. We live in a service economy so most of the cost is advertising, marketing, head office in a high rent location full of MBAs poncing about with PowerPoint demonstrations of the latest management fads, it all adds up.
 
I think it is in a recent Car magazine where one of the top guys went between Vauxhall/Opel and Audi, he was saying that Vauxhall put almost as good kit into their cars but can't charge anywhere near what Audi do. "Upmarket" brands can charge more for everything from the car, the servicing and extras.
 
I'm sorry, but even current Vauxhalls are way behind VW and Audi, with the Insignia being, in my one-off experience, a horrible drive. And that's before they get old.
 
They acknowledge the difference in dynamics. It's the other stuff that is meant to be similar. I bow to your experience. But would an Astra sporty model have a same priced BMW be as much fun?
 
Anyone who thinks a seat or skoda is the same as an audi has never owned both. The seat and Skoda's are good cars but the Audi's are more refined as you would expect.

With regards Micra and Audi - the engines will be more complex, the materials better quality, the vehicle will be designed better, the car will drive better, it will look better
 
You are mostly paying for the brand. It is why the smart money (if you really want a VAG-mobile) goes to a Skoda or Volkswagen.

I'm also bemused by BMW pricing. The M135i and M235i share the same fabulous chassis and superlative engine, but the former has two more doors and offers much more practicality. Yet, because the latter is higher-up in the series, it attracts a bigger premium.

Similarly, my 335i Touring has all of the goodies (as standard) compared to the identically specified 435i Gran-Coupe, but the latter attracts a 15% price premium. I'm sure it doesn't cost 15% more to manufacture or ship.
 
The idea that there is a direct relationship behind direct cost and price is a naive one. Companies charge what they can get away with. The well managed ones do, at least.
 
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