New Car Profit Margins

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Sun 14 Dec 2003 17:30
New Car Profit Margins - Cardew
This is really triggered by HJ's road test of the BMW 520iSE. In it he says that it is worth paying the extra £1,400 for the extra power and torque of the 525iSE.

Much as that may be true, as the cars have an identical specification, it seems to seems to me that £1,400 is a lot to pay for just having 6 bigger holes in the middle of the engine. Even worse is the price differential between the 520iSE and 530iSE - a whopping £5,410. Of this approx £1000 is for the metallic paint and park control and the rest is for even bigger holes in the engine.

Although the report doesn't say so I accept there may be some beefing up of the running gear, but there must be a huge extra profit margin in these bigger engined cars.
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Sun 14 Dec 2003 17:38
New Car Profit Margins - Manatee
That's marketing. Perhaps they're making the bigger ones pay for the advertising!
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Sun 14 Dec 2003 19:21
New Car Profit Margins - Cardew
HJ,
Your point about the requirement for extra power was made very clear in your report and I suspect most will pay more for this. I am simply saying I don't think BMW can justify this much extra money. By the way I liked the idea of a bottom of the range road test.

According to your report Drivethedeal have a difference of £1,792 between the 520iSE and 525iSE instead of £1,410 on BMW's list price.

C
While in pendant mode is there a mistake in the combined mpg for the 520iSE Automatic?
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Sun 14 Dec 2003 19:54
New Car Profit Margins - Vin {P}
That's the beauty of capitalism. Ifpeople will pay it, it's justified. This, by the way, is not a criticism of capitalism, it's the beauty of it. Because the world is like this, you get the choice of all the thousands of makes and models you can currently buy. Provided one of them meets your requirents of spec vs price, you can buy it and be happy. You're happy and the manufacturer is happy. What more could you want at Christmas?

V
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