I read about the old scrappage scheme yesterday, some folk think it may be re-introduced to start getting rid of old oil burners, and it got me thinking about the actual economics of car production. The last scrappage scheme was something like £2000 off a new car.
So let's a take a middle of the road car that retails at, say, £18000. £3000 of that is VAT, so the cost of the car is only £15,000. The part that interests me is what it actually costs to make. So there's the cost of all the parts, then the assembly costs, labour costs, transport costs, fuel costs for the factory, dealer profit margin.....any more? I would love to know how much it costs to build a car without all of the above and how the hell the manufacturer can make a half decent profit.
To make any sort of profit from the above figures, surely it can't cost any more than, say, five grand?