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>> Now, explain to me again, *how* can Fiat afford to buy Ferrari??
>
> Errors in your above assumptions:
>
> Volume car makers are generally on about 5% profit (Fiat had 3% in 2010)
> More expensive brands can generate 10% profit (eg BMW/Daimler etc.)
> Ferrari made 15% profit in 2010
Now, do you mean "the company made 15% profit", or do you mean "each
time the company sells 1 car, 15% of the sale price is profit"?
Really? You can buy an actual Ferrari for that amount of money??
> The development cost for designing and testing a car is HUGE
Well, yes, anything safety-critical usually has very large design and
test costs. (If you think cars are expensive, try developing drugs for a
living...)
Presumably the cost of testing a cheap car is exactly the same as the
cost of testing an expensive car though.
> Manufacturing costs are way cheaper per car if you are making 2 million
> rather than 5000 a year.
As I understand it, set-up cost is usually very large. So if you
manufacture more units, the set-up cost is divided between more units,
so the /per unit/ price is lower. Presumably the actual set-up cost
itself is identical in both cases.
There are things like CDs which cost virtually nothing to manufacture,
but still cost a lot to set up. So the set-up cost is virtually the
entire cost. I'm not sure that analysis applies to cars though; they're
vastly more complicated to manufacture, and they also contain /metal/,
the most expensive material known to man...
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> Now, do you mean "the company made 15% profit", or do you mean "each
> time the company sells 1 car, 15% of the sale price is profit"?
The company made 15% profit. Given they only sell cars, on average each
car will make 15% profit also?
>
> Really? You can buy an actual Ferrari for that amount of money??
http://www.carpages.co.uk/guide/ferrari/
> Well, yes, anything safety-critical usually has very large design and
> test costs. (If you think cars are expensive, try developing drugs for a
> living...)
>
> Presumably the cost of testing a cheap car is exactly the same as the
> cost of testing an expensive car though.
Apart from the cost of the cars used in testing, yes the procedures and
equipment will be the same. The cost of destroying 10 Ferraris when you
only plan to sell a few thousand of them is going to push up the per-car
price noticeably though...
> As I understand it, set-up cost is usually very large. So if you
> manufacture more units, the set-up cost is divided between more units,
> so the /per unit/ price is lower. Presumably the actual set-up cost
> itself is identical in both cases.
Probably even more expensive for the cheap cars, because you will need
all sorts of robots and assembly lines to keep the per-car cost down.
For the Ferraris it is simply too expensive to get such sophisticated
equipment, much cheaper per-car to just do the process by hand, but
still many times more expensive per-car than one mass produced in a
highly automated factory.
> There are things like CDs which cost virtually nothing to manufacture,
> but still cost a lot to set up. So the set-up cost is virtually the
> entire cost.
Sure, but if you were to make 5000 CDs a year in your basement, the
per-piece price of making the CDs is going to be huge, even if your
set-up costs would be tiny compared to the big factories.
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On 12/04/2012 02:46 PM, scott wrote:
>> Now, do you mean "the company made 15% profit", or do you mean "each
>> time the company sells 1 car, 15% of the sale price is profit"?
>
> The company made 15% profit. Given they only sell cars, on average each
> car will make 15% profit also?
Well, I guess it depends on what you define as "profit". I was thinking
in terms of the sale price minus the cost of making the thing. Ferrari
no doubt also have other fixed overhead costs not related to any one
specific car, which they still also need to pay for. I'm sure
accountants have more precise terms for describing these things.
>>
>> Really? You can buy an actual Ferrari for that amount of money??
>
> http://www.carpages.co.uk/guide/ferrari/
Hmm. That still seems awfully low for the most expensive brand of car in
the entire world...
> Apart from the cost of the cars used in testing, yes the procedures and
> equipment will be the same. The cost of destroying 10 Ferraris when you
> only plan to sell a few thousand of them is going to push up the per-car
> price noticeably though...
Seems reasonable.
>> As I understand it, set-up cost is usually very large. So if you
>> manufacture more units, the set-up cost is divided between more units,
>> so the /per unit/ price is lower. Presumably the actual set-up cost
>> itself is identical in both cases.
>
> Probably even more expensive for the cheap cars, because you will need
> all sorts of robots and assembly lines to keep the per-car cost down.
> For the Ferraris it is simply too expensive to get such sophisticated
> equipment, much cheaper per-car to just do the process by hand, but
> still many times more expensive per-car than one mass produced in a
> highly automated factory.
OK.
>> There are things like CDs which cost virtually nothing to manufacture,
>> but still cost a lot to set up. So the set-up cost is virtually the
>> entire cost.
>
> Sure, but if you were to make 5000 CDs a year in your basement, the
> per-piece price of making the CDs is going to be huge, even if your
> set-up costs would be tiny compared to the big factories.
I tell you what, if somebody even managed to pull that off in the first
place, even if they only made one single usable CD, I'd still be pretty
impressed. :-D Yeah, that ain't gonna be cheap though. ;-)
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> Well, I guess it depends on what you define as "profit". I was thinking
> in terms of the sale price minus the cost of making the thing.
There is the marginal cost of making a car, which is the amount it costs
to make "one more", assuming you already have all the design finished
and assembly lines in place.
Also don't forget the selling price includes taxes (20% in UK),
transportation costs, registration costs, dealer profit margin etc.
So to measure profit as the selling price minus the marginal cost
doesn't seem too helpful.
> I tell you what, if somebody even managed to pull that off in the first
> place, even if they only made one single usable CD, I'd still be pretty
> impressed. :-D Yeah, that ain't gonna be cheap though. ;-)
It's actually quite an interesting problem. What is the cheapest way to
manufacture: a) 1 CD, b) 100 CDs, c) 10000 CDs, d) 1000000 CDs. You can
do the same for cars, circuit boards, bikes, organs, whatever.
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Le_Forgeron escreveu:
> Le 12/04/2012 10:15, Invisible nous fit lire :
>>> oh, you're crying for nothing.
>>>
>>> trying to import a Kindle reader from Brazil means you're supposed to
>>> pay 109 for the product and more than that for the import fees,
>>> effectively more than doubling the final price.
>> But the question is, do they *tell* you that before you actually
>> purchase the thing? Or do you just find out after the fact?
they state it as such and is why I don't have a kindle. :(
> It's a protective law for Brazil: if not made in Brazil, it's taxed
> (heavily).
> Purpose is to help companies to be from Brazil if they want to avoid
> that tax.
yes, market reserve all over...
the real purpose is to spread piracy rampant...
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Warp escreveu:
> nemesis <nam### [at] gmail com> wrote:
>> Warp escreveu:
>>> (For example, good luck trying to stop Sony from getting any of your
>>> money.)
>
>> hey, Microsoft makes money off of Linux and Android, so what would you
>> know?... :p
>
> I don't think its comparable. Maybe MS makes money *using* Linux and
> Android, but that doesn't mean that *your* money goes to MS when you "buy"
> Linux or Android (them costing nothing, after all).
http://articles.businessinsider.com/2011-09-29/tech/30216822_1_htc-microsoft-android-device
patent deals after heavy FUD.
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On 4/11/2012 6:05, Invisible wrote:
> Currently I'm seriously ****ed off with Amazon. When you buy something from
> them and the price on screen is X, you expect to pay X, plus some negligible
> amount for postage. You to /not/ expect to pay 1.5 X.
What was the increase? Postage? Did you buy from amazon, or from someone
selling their stuff through amazon?
> But hey, what can you do? It's not as if you can, I don't know, /file a
> complaint/ or anything. Nor that they would even /care/ if you did...
I think you underestimate amazon's customer service. They're one of the best
in the business.
--
Darren New, San Diego CA, USA (PST)
"Oh no! We're out of code juice!"
"Don't panic. There's beans and filters
in the cabinet."
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On Thu, 12 Apr 2012 15:12:07 +0100, Invisible wrote:
> Hmm. That still seems awfully low for the most expensive brand of car in
> the entire world...
Faulty assumption there as well.
Off the top of my head: Lamborghini, Bugatti, and McLaren are all likely
candidates to be more expensive than a Ferrari.
The Mercedes Benz CLR McLaren will set you back about $450K.
Jim
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On 12/04/2012 06:56 PM, nemesis wrote:
> Le_Forgeron escreveu:
>> Le 12/04/2012 10:15, Invisible nous fit lire :
>>>> oh, you're crying for nothing.
>>>>
>>>> trying to import a Kindle reader from Brazil means you're supposed to
>>>> pay 109 for the product and more than that for the import fees,
>>>> effectively more than doubling the final price.
>>> But the question is, do they *tell* you that before you actually
>>> purchase the thing? Or do you just find out after the fact?
>
> they state it as such and is why I don't have a kindle. :(
Right. So they warn you it's going to cost a fortune before you buy it.
It's kinda sad that it costs so much, but not really Amazon's fault.
My problem is that I wasn't told there would be a steep import duty to
pay. If I had known that, I wouldn't have purchased the product. But
they didn't warn me. (Hell, I didn't even know that it was coming from a
different country. Or that it wasn't Amazon themselves selling it...)
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>> Hmm. That still seems awfully low for the most expensive brand of car in
>> the entire world...
>
> Faulty assumption there as well.
>
> Off the top of my head: Lamborghini, Bugatti, and McLaren are all likely
> candidates to be more expensive than a Ferrari.
Is Lamborghini still going? And for that matter, I didn't know that
Bugatti or McLaren actually /make/ road cars.
> The Mercedes Benz CLR McLaren will set you back about $450K.
That's still quite a bit less than the £800,000 I was expecting to pay
for the most basic entry-level Ferrari. I was expecting a top-end one to
be several million, if not tens of millions.
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