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Old 06-16-2004, 07:05 AM   #1
MaChao
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Where does their money come from?!

I'm talking about manufacturers like Ferrari...Porsche...Aston Martin...mostly the exotic cars.

Of course, from what I hear, these are some of the best cars out there - with excellent handling, great acceleration, etc. But these cars are rare!

How is it possible that companies like Ford or Toyota cannot (or maybe do not?) make cars like these even though they are some of the leading car manufacturers of the word? While companies like Porsche and Ferrari, who sell a small number in comparison to others, make cars that are so powerful?

Where do they have the money to come up with this technology?

I hope I'm asking my question in an easy-to-understand way.
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Old 06-16-2004, 10:40 AM   #2
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It's a dim question to ask really but, i'm goin' to look in to it and see what i can find. don't think i'll be able to find out much though!
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Old 06-16-2004, 03:16 PM   #3
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It's pretty simple: They CHARGE money for the cars. How many people are going to buy a $200,000 handbuilt Toyota? Power isn't an issue. GM can build an inexpensive V8 that puts out supercar levels of power. In fact, back in the day, a number of exotics around the world used american engines in coachbuilt bodies and chassis. the Jensen Interceptor, teh Ido Grifo and Iso Rivolta, the Bizzarini, and many, many more.

the mass manufacturers CAN produce small, handbuilt exotics. But there is no economy for selling them, usually (Ford's trying with their 200+ mph GT, but even then, the market is small).

And in many cases, the companies cannot make money off of making exotics and supercars. Ferrari is owned by Fiat, who pays to keep them around. lamborghini is owned by Volkswagen/Audi, after passing through many differnt owners over the years, al lof whome lost money. Aston Martin is now owned by Ford, who provides money tomake the cars. Porsche sells engineering to other companies to stay afloat (and of course, now has an SUV to make money off of. One that was jointly developed with VW). Most other companies, like Panoz and Koenigsegg, use engines and transmissions sourced from other places (like Ford). That keeps development cost down, so that they can turn their attention to the chassis and bodywork, which still costs a ton.

A small company can make a handmade, expensive car. But they can't make mass produced cars that sell inexpensively. A large company can easily make an inexpensive car that sells in large numbers, and thus usually finds no need in making an expensive, limited production exotic. Occasionally they do, and it's special (besides the Ford GT40, Nissan had a similar exotic, as did Toyota). but it's just not economically cost effective to do.
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Old 06-16-2004, 06:46 PM   #4
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Quote:
Originally Posted by ChrisV
It's pretty simple: They CHARGE money for the cars. How many people are going to buy a $200,000 handbuilt Toyota? Power isn't an issue. GM can build an inexpensive V8 that puts out supercar levels of power. In fact, back in the day, a number of exotics around the world used american engines in coachbuilt bodies and chassis. the Jensen Interceptor, teh Ido Grifo and Iso Rivolta, the Bizzarini, and many, many more.

the mass manufacturers CAN produce small, handbuilt exotics. But there is no economy for selling them, usually (Ford's trying with their 200+ mph GT, but even then, the market is small).

And in many cases, the companies cannot make money off of making exotics and supercars. Ferrari is owned by Fiat, who pays to keep them around. lamborghini is owned by Volkswagen/Audi, after passing through many differnt owners over the years, al lof whome lost money. Aston Martin is now owned by Ford, who provides money tomake the cars. Porsche sells engineering to other companies to stay afloat (and of course, now has an SUV to make money off of. One that was jointly developed with VW). Most other companies, like Panoz and Koenigsegg, use engines and transmissions sourced from other places (like Ford). That keeps development cost down, so that they can turn their attention to the chassis and bodywork, which still costs a ton.

A small company can make a handmade, expensive car. But they can't make mass produced cars that sell inexpensively. A large company can easily make an inexpensive car that sells in large numbers, and thus usually finds no need in making an expensive, limited production exotic. Occasionally they do, and it's special (besides the Ford GT40, Nissan had a similar exotic, as did Toyota). but it's just not economically cost effective to do.

Exactly! The exotic car companies are usually part of a bigger, more public focused company like Lambo to VW, Ferrari to Fiat. Lambo are a great example of economic failure because the founder had so much trouble starting it up, he had to sell his company before it even became a famous exotic car maker. Now it's in the hands of VW.

P.S. ChrisV, you really know your stuff. Every post that you put up is very clear and well written. Bravo!
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Old 06-16-2004, 07:57 PM   #5
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Quote:
Originally Posted by ChrisV
It's pretty simple: They CHARGE money for the cars. How many people are going to buy a $200,000 handbuilt Toyota? (Ford's trying with their 200+ mph GT, but even then, the market is small).

My thoughts exactly!

Who's going to buy a FORD "supercar" and pay an outrageous price?

Not many.
.
.
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Old 06-16-2004, 08:22 PM   #6
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Quote:
Originally Posted by BavarianWheels
My thoughts exactly!

Who's going to buy a FORD "supercar" and pay an outrageous price?

Not many.
.
.

Jay Leno?
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Old 06-16-2004, 09:15 PM   #7
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looks like i wont even need to look in to it...it's all done!
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Old 06-16-2004, 11:14 PM   #8
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So how do you fit kit cars into this equation of yours?

and specialist manufacutres like morgan, lotus, tiger, westfield, caterham, garder douglas, areil,

Lotus for example makes the elise/exise which is the price of a family hatchback, but performs like a super car.

Last edited by cinqyg : 06-16-2004 at 11:17 PM.
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Old 06-17-2004, 09:06 PM   #9
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Originally Posted by cinqyg
So how do you fit kit cars into this equation of yours?

and specialist manufacutres like morgan, lotus, tiger, westfield, caterham, garder douglas, areil,

Lotus for example makes the elise/exise which is the price of a family hatchback, but performs like a super car.

Lotus is, like Porsche an engineering firm, and larger corporations pay good money to have them do engineering work. GM spent aLOT of money with Lotus to get Lotus branded cars (from the Lotus Carlton to the Isuzu Impulse with "Handling by Lotus" badging) and Lotus engieering (like the backbone chassis work on the C4 Corvette).

Morgan has been around since the '30s, and most of it's cars are still very much the same. All the tooling got paid off decades ago, and they still only build a few cars at a time. TVR is similar. Westfield and Caterham make a car that CAN be built for $1000, adds some refinement, and sells it for $30k! And even THEN, they use someone else's engines! You can save a bunch of money on individual components when the engineering and tooling costs are foisted off onto a major manufacturer.

Kit cars are similar. Buy a body kit for $4k, and I can guarantee you that there is only about $300 in materials in it and only a little more for the cost of the molds. The molds may have cost $10k to create, but if you amortize the cost over 10 cars, that's still only a grand per car in cost, so the other $3000 is profit for the kit car company. As you make more bodies, that cost per car goes down (after 100 cars, that makes the costs for the molds less than $300 per car...). Anothger thing for kit cars is that they tend to require you to buy used parts from a nother car: a car that already had all its development work paid for, and the individual parts depreciated. it costs teh manufacturer nothing to "develop" those parts in production ready form, as they are coming from major manufacturers, and the kit car BUILDER is paying for them.
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Old 06-17-2004, 09:09 PM   #10
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Quote:
Originally Posted by BavarianWheels
My thoughts exactly!

Who's going to buy a FORD "supercar" and pay an outrageous price?

Not many.
.
.

They dont' need many. All they have to have is the same percentage of the people that are drooling over it that also have enough money to buy it. They'll sell every one they make, just like the replcar makers for GT40s do. THAT car is an icon.

If I won the lottery, it's the first car on the list to buy. Followed by an Aston Vanquish, a Ferrari 250 Lusso, and a '67 Etype Jag convertible...

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Old 06-17-2004, 09:33 PM   #11
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Quote:
Originally Posted by ChrisV
Lotus is, like Porsche an engineering firm, and larger corporations pay good money to have them do engineering work. GM spent aLOT of money with Lotus to get Lotus branded cars (from the Lotus Carlton to the Isuzu Impulse with "Handling by Lotus" badging) and Lotus engieering (like the backbone chassis work on the C4 Corvette).

Morgan has been around since the '30s, and most of it's cars are still very much the same. All the tooling got paid off decades ago, and they still only build a few cars at a time. TVR is similar. Westfield and Caterham make a car that CAN be built for $1000, adds some refinement, and sells it for $30k! And even THEN, they use someone else's engines! You can save a bunch of money on individual components when the engineering and tooling costs are foisted off onto a major manufacturer.

Kit cars are similar. Buy a body kit for $4k, and I can guarantee you that there is only about $300 in materials in it and only a little more for the cost of the molds. The molds may have cost $10k to create, but if you amortize the cost over 10 cars, that's still only a grand per car in cost, so the other $3000 is profit for the kit car company. As you make more bodies, that cost per car goes down (after 100 cars, that makes the costs for the molds less than $300 per car...). Anothger thing for kit cars is that they tend to require you to buy used parts from a nother car: a car that already had all its development work paid for, and the individual parts depreciated. it costs teh manufacturer nothing to "develop" those parts in production ready form, as they are coming from major manufacturers, and the kit car BUILDER is paying for them.

I think you have some of your number wrong there yeah alot of lotus's work does come from other companies and thats a good thing as far as i can see they build the VX220 for Vauxhall (GM) on the same production line as the Exige its basically the same car.

This tooling and Morgan, well there isnt any, its all hand made, every single panel is beaten from sheet by hand, same with the new aero 8 i admit that most cars share engines, but then looking at engines as a whole they are oftern shared across many manufactures becuase the development costs are so high. I wonder how many 5.7 V8's chevy has made must be hundreds of millions of units, there is some variation from one to another but in the main then they realaivley similar and they have been upgrading it since the first year of production in 1960 something or other may be earlier.

I guess you have imprt charges on it and stuff, but over here a caterham is about 13k (exchange rate is 1.77 today) but bearing inmind the performace of the car and for the money nothing can beat it.

With the bodies for kit cars well, there is a right way and a wrong way to make them and oftern they are just made the cheapesat posible way, i still think that they would be a little more than $300 (180) because the resin is 6/kg and the glass well it depends how you do it. but considering that the resin fibre fraction is relaitvly por there is alot of resin in it so there not that strong in the main, there in the dark ages of hand laminating.

Bearing in mind that the front end of the corvette is GRP.


Personally i think that if you gave me 15k i could build a faster more agile car than a production model of twice the price, using all new parts.

Why dont more manufacutres start using composite materials it makes very little sence to me, i guess its the image, abit like diesels and americans they dont seem to mix.
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Old 06-17-2004, 09:56 PM   #12
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Quote:
Originally Posted by cinqyg
I think you have some of your number wrong there yeah alot of lotus's work does come from other companies and thats a good thing as far as i can see they build the VX220 for Vauxhall (GM) on the same production line as the Exige its basically the same car.

I was using what it's cost me to do fiberglass work on race cars and kit cars here. and what we've found out when tooling up for larger runs of kits.

Quote:
This tooling and Morgan, well there isnt any, its all hand made, every single panel is beaten from sheet by hand,

It's beaten by hand, but the bucks are still there. And a lot of parts are cast, or in jigs, and the develoipmetn cost in making those wood forms and frame jigs was paid for ages ago. While they do hammer and wheel the panels to form, they don't have to have a multi billion dollar machine to stamp out thousands of identical panels a month.

Quote:
same with the new aero 8 i admit that most cars share engines, but then looking at engines as a whole they are oftern shared across many manufactures becuase the development costs are so high.

They are often shared from a larger manufacturer to smaller ones. Your example of the Chevy small block is true. Look at them being used in various British cars, and Italian cars from smaller companies over the decades. Same for the Ford V8s use in some TVRs before, and now the Ford V8 in the Koenigsegg, and top MG). Another prime example is the ubiquitous Buick/Oldsmobile/Rover aluminum V8, starting out at 3.5 liters, and ending up at 5 liters. it was used in everything, from TVRs, to MGs, to Westfields, etc. No development costs to the companies using it after Rover bought it from GM in the early '60s. It's cheap and easy to build a car around that.


Quote:
I guess you have imprt charges on it and stuff, but over here a caterham is about 13k (exchange rate is 1.77 today) but bearing inmind the performace of the car and for the money nothing can beat it.

Ture, but there are no creature comforts, which most cars of that price range have. Which just proves that even with almost nothing to it, it still costs a bit to build a production performance car on a small scale.

Quote:
Bearing in mind that the front end of the corvette is GRP.

The Fiberglass of teh Corvette is a completely unique process, as it's pressure formed between two tooled metal presses. it isn't chopper gunned like cheap fiberglass, and it isn't hand laid like the more expensive fiberglass kits. The metal molds are as expensive and more complex than the stamping tooling for sheet metal.


Quote:
Personally i think that if you gave me 15k i could build a faster more agile car than a production model of twice the price, using all new parts.

Not using all new parts, you couldn't. And you couldn't do it and have it certified in the same way a factory car is. or come with a warrantee, or have 100k miles of testing done on it to make sure it can be warrantied. Nor will it have all the government required safety gear on it.
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Old 06-17-2004, 10:44 PM   #13
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Quote:
Originally Posted by ChrisV
I was using what it's cost me to do fiberglass work on race cars and kit cars here. and what we've found out when tooling up for larger runs of kits.



It's beaten by hand, but the bucks are still there. And a lot of parts are cast, or in jigs, and the develoipmetn cost in making those wood forms and frame jigs was paid for ages ago. While they do hammer and wheel the panels to form, they don't have to have a multi billion dollar machine to stamp out thousands of identical panels a month.
.

They dont have the tooling but they still have the man power, and if you ahve ever seen a rolls royce qualifeid beater its a work of art.


Quote:
Originally Posted by ChrisV

They are often shared from a larger manufacturer to smaller ones. Your example of the Chevy small block is true. Look at them being used in various British cars, and Italian cars from smaller companies over the decades. Same for the Ford V8s use in some TVRs before, and now the Ford V8 in the Koenigsegg, and top MG). Another prime example is the ubiquitous Buick/Oldsmobile/Rover aluminum V8, starting out at 3.5 liters, and ending up at 5 liters. it was used in everything, from TVRs, to MGs, to Westfields, etc. No development costs to the companies using it after Rover bought it from GM in the early '60s. It's cheap and easy to build a car around that. .


I think that the SD1/ buick 215 has to be running a close thrid or forth after the windsor/cleavland engines might even be level. As the Ford engines have been less widely used in europe than than the SD1. Most of the land rovers have got the SD1 in along with all the others that you mentioned.

Quote:
Originally Posted by ChrisV
Ture, but there are no creature comforts, which most cars of that price range have. Which just proves that even with almost nothing to it, it still costs a bit to build a production performance car on a small scale.

Well it all depends on what you want from a car really, horses for courses. Air conditioning in the uk isnt really a must 90% of the time, and when your flying around a track then the last thing your worred about is is you have electric windows.

Quote:
Originally Posted by ChrisV
The Fiberglass of teh Corvette is a completely unique process, as it's pressure formed between two tooled metal presses. it isn't chopper gunned like cheap fiberglass, and it isn't hand laid like the more expensive fiberglass kits. The metal molds are as expensive and more complex than the stamping tooling for sheet metal.
.

ITs not unique its just RTM (Resin Transfer Moulding), if its done under positve presure and VARTM (Vacuum Assisted RTM) if its done under negative presure. Its used to increase the resin fibre fraction. Its been around along time mainly for shrapnel hemlets, where it started life in the early 60's. The moulds are made of diffrent materials depneding on the production run, everything from the aluminum ones with teflon carbide liners like they use for the front end of vettes.


Quote:
Originally Posted by ChrisV
Not using all new parts, you couldn't. And you couldn't do it and have it certified in the same way a factory car is. or come with a warrantee, or have 100k miles of testing done on it to make sure it can be warrantied. Nor will it have all the government required safety gear on it.

I could have the goverment safty gear, I could make it pass and SVA test then its the same standard as manufacutures cars
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Old 06-18-2004, 03:14 PM   #14
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Originally Posted by cinqyg
They dont have the tooling but they still have the man power, and if you ahve ever seen a rolls royce qualifeid beater its a work of art.

yes, I have. Anyone who does good work on an english wheel is a real craftsman.



Quote:
Well it all depends on what you want from a car really, horses for courses. Air conditioning in the uk isnt really a must 90% of the time, and when your flying around a track then the last thing your worred about is is you have electric windows.

Ahh, but it's part of the cost of buiuldintg a street car, and why they cost what they do. Sure, if you built a single car for yourself, you could dispense with that easily. But iof your'e building a car to appeal toa wide range of people, you have to have what they expect. it can't be crudely slapped together to get the best lap times at th eexpense of everything else, even if our PERSONAL cars can be that way.

Quote:
ITs not unique its just RTM (Resin Transfer Moulding), if its done under positve presure and VARTM (Vacuum Assisted RTM) if its done under negative presure. Its used to increase the resin fibre fraction. Its been around along time mainly for shrapnel hemlets, where it started life in the early 60's. The moulds are made of diffrent materials depneding on the production run, everything from the aluminum ones with teflon carbide liners like they use for the front end of vettes.

It's unique for making cars, however. It's not used for cars from TVR, Ginetta, etc, or any kit cars, or most boats. Hand laying and chopper gun are th norm in the automotive realm.

And the front end of a corvette is a tad larger than a shrapnel helmet, so the tooling is a bit more complex.

Quote:
I could have the goverment safty gear, I could make it pass and SVA test then its the same standard as manufacutures cars


How much of those parts would be new? Have you even PRICED those parts new? How many of them would you develop on your OWN? And tool up for a manufacturing run for? How much does it cost to get certification on a single car or a small run? have you factored that into the cost? You have to crash test one to get safety certification. that means you have to build at least two, if not more, just to get ONE with federal level certification.
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Old 06-18-2004, 04:28 PM   #15
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Originally Posted by ChrisV
yes, I have. Anyone who does good work on an english wheel is a real craftsman.

very much agree


Quote:
Originally Posted by ChrisV
Ahh, but it's part of the cost of buiuldintg a street car, and why they cost what they do. Sure, if you built a single car for yourself, you could dispense with that easily. But iof your'e building a car to appeal toa wide range of people, you have to have what they expect. it can't be crudely slapped together to get the best lap times at th eexpense of everything else, even if our PERSONAL cars can be that way.

The last thing i do is crudely slap stuff together!


Quote:
Originally Posted by ChrisV
It's unique for making cars, however. It's not used for cars from TVR, Ginetta, etc, or any kit cars, or most boats. Hand laying and chopper gun are th norm in the automotive realm.

And the front end of a corvette is a tad larger than a shrapnel helmet, so the tooling is a bit more complex.

I think you need to become a composites engineer before you can comment here. TVR use RTM lite because they dont put the quantiy out, they use epoxy moulds, under negative presure, lots of boats are built using RTM, Racing Sailboats, Laser, Hobie make all there boats using VARTM. Most of the yachts switched over to vac bag about 3-5 years ago becuase of new helth and safty laws regualting solvent fumes.

Westfield and caterham vac bag.

Advanced Composites who build F1 cars do all there infusions under +ve presure and auto clave them.

Quote:
Originally Posted by ChrisV
How much of those parts would be new? Have you even PRICED those parts new? How many of them would you develop on your OWN? And tool up for a manufacturing run for? How much does it cost to get certification on a single car or a small run? have you factored that into the cost? You have to crash test one to get safety certification. that means you have to build at least two, if not more, just to get ONE with federal level certification.

Welll if the production run is under 500 pa then you dont need to crash test it! I dont work to your fedrual rules not really interested in them either, there ruffly equiverlent to whats in place here. As a mater of fact Ford had problems geting the S-type (its based on the lincoln towncar) to pass a euro crash test becuase they were more stringent 40mph not 35 etc.

Going back to where this came from. my point was if you want a performance car on a budget then you are best building it from scratch not buying something and modding it.

In relation to engines, I admit i would not build an engine from scrach as it is a very diffcult job, probibly use some heads and make a block and sump up.

One example where you can save weight in this way is to use a foam aluminum for heated structural areas composite's for lower temperature areas. It would still need steel liners, if you want to argue the toss overmaterials and proceses ill put an MAMAT SAPI balistic vest on you shoot
me and you with a ss109 round at the plate and i will walk away with a brusie.

If i dont know what im doing with materials then why do i work with ARL and DSTL desinging armour.

Ill give you 2 months to design something with an aerial desnisty of under 28kg/sq meter and a pack cost of $500 and see if you will face me in the same way.


I may not be the best automotive engineer on the planet but, i dont profess to be either i just bring the experiances that i have had to the forum, just like everyone else. The point is that our reasoning differs and i am not an expert on the usa but more of an expert than you are on the uk and europe.

As we all know manufacutres specs alter from place to place due to lots of factors. so may be were all right soem of the time.
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