What Car? Lifts Lid on Manufacturers’ Profits

Have you seen the survey What Car? conducted forCar Dealer Mag? You really should have a look – it came up with some real surprises.

In a nutshell, What Car? asked 1,500 people what percentage of a new car sale they thought was profit, with many responding that manufacturers would make 10-20% on each new car they make.

But 21.3% said they thought manufacturers’ profit was 5-10% and a quarter of respondents indicated that car makers would earn more than 30% profit.

The true answer is a bit of a mixed picture, reports Car Dealer Mag.   For example, very high end manufacturers can make over 20% profit per car, but lower end producers struggle with sub-10% profits.

In a survey that delivers quite a few surprises and blows away many misconceptions, What Car? editorial director Jim Holder says that for the ‘vast majority’ of car manufacturers it is ‘not the licence to print money that many think it is’.

He said: “The bottom line is that car manufacturing and car retailing is ridiculously tough, with even best-in-class margins around 20 per cent, very healthy margins around 10 per cent and some operating in the low single digit zone, after spending billions on research, development, infrastructure and more.”