These parts are still only able to be shared across a vastly reduced volume of cars, and the ability to amortize R&D is still compromised when compared the standard non-M cars...

Any low volume production car will typically cost more per unit to produce than the volume models.

 

lol an M car is hardly low volume. How many M5s and M6s are produced a year world wide? 20,000? It may be low volume in relation to BMWs best selling model (3-series), but 20,000 a year is pretty hefty

That's not even including the M3, which as I said before just uses a slightly tweaked V10 with two less cylinders making R&D costs for the M3 V8 virtually non-existant.

 

What part of the concept of relativity do you fail to understand? It doesn't matter about specific numbers. The M5 is the lowest volume model in the E60 family. BMW makes thousands more standard E60s than it makes M5s. BMW does not put the more expensive components found on the M5 in the standard E60s. BMW does not get to amortize whatever R&D is specific to the M models over as many units.

Are these concepts really so hard to grasp?

 

Just as an example, doesn't VW lose several hundred thousand producing each Bugatti Veyron? They accept the loss because it helps sell lesser models in their stable of cars (which in their case is everything from the Golf to the 911). Even though they take a huge loss per car they continue to produce them, why? Rolling billboards, that's why

 

all these companies make there money in service/maintenance costs lol

 

I bet my cousin in india can make it cheap. lol

 

I would say that you are WAYYY off on this statement.. a company like BMW sure isnt covering thier overhead and profits with a 4% markup on thier product... Think about that...4%?? Are you kidding me.. they make a 130K M5 and make 5200 bucks at the end of the day??? Yowwww...

 

Mr "concept of relativity".... who pissed in your corn flakes... relax, we're just talking here. People on this forum recently have just been damn ignorant and rude, not all of us our experts, hence the discussion.


The statement of 4%-8% markup on thier product is hardly accurate, agree? The cost to design, produce and market such a car must be in the hundreds and hundreds of millions is it not? I am no expert, but that would take a damn long time to pay off your investment if your only making 5-7K per car...

 

BMW's gross margin for the year ended is December 2009 was 15.61%. That's across all models and all business units. That's towards the higher end of the industry, but by comparison, Porsche's gross margin for the year ended 1/31/2010 was 37.36%.

 

Are you high on crack? First of all, M5's are cheaper in the US, a bare M5 is the US costs just around $86,000 and they don't make a lot of money on a bare M5... you do understand that you live in England right? Your M5 costs that much because your paying taxes out the ass to the government. BMW makes money on the mass produced cars, 3 and 5 seires (non M). They still make money on the M, but the margins are smaller. A bone dry M does not make a lot of revenue. Other cars might make 10-17%....but not a bone dry M. They make more if the car is loaded, and usually people buy M5's with a lot of options...