Quote:
Originally Posted by roastbeef
Yea, not buying it.
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Its not 5% profit margin per car in terms of how much it costs to buid a car vs how much they sell it for. It doesnt cost bmw $95k in parts and labor to make a $100k 7 series. Not how that 5% was calculated. But it might cost them $45k in parts to make that $100k 7 series, the rest of the $50k (on average) costs isnt directly associated with that particular car. It is made up of wages and other compensation for workers(still gotta pay workers even if that one 7 series wouldnt have been produced), designers, R&D teams, warranty work, lawsuits, //M-arketing, and etc. 5% profit is after everything and everyone is paid for and BMW pays its employees and management and all the top bosses. Whats left is an $X amount of dollars that are divided by X amount of cars to get a average $5k net profit per vehicle after every single possible expense is paid for. Hope that makes sense.