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Pricing Trivia

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11 March 2000
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I think that this has been mentioned before but I had a conversation with an Acura salesman today in which he mentioned that each NSX costs Honda $110,000 to build meaning that they are losing on the order of $20K on each car.
He also mentioned the oft-repeated rumor that the next NSX will be steel-bodied, mass produced, and should sell for around $60K. Asked about the V-8 he didn't know but mentioned the RL and that he doesn't believe the next NSX could be a hybrid.

------------------
Andrew Henderson
The NSX Model List Page

"We have long acknowledged that enthusiasm for things automotive is a sure
sign of emotional instability if not outright dementia"
- Brock Yates
 
Originally posted by lemansnsx:
I think that this has been mentioned before but I had a conversation with an Acura salesman today in which he mentioned that each NSX costs Honda $110,000 to build meaning that they are losing on the order of $20K on each car.
He also mentioned the oft-repeated rumor that the next NSX will be steel-bodied, mass produced, and should sell for around $60K. Asked about the V-8 he didn't know but mentioned the RL and that he doesn't believe the next NSX could be a hybrid.


I keep hearing the same.what is your opinion if that turns out to be a reality, do you think that such a deep price cut on the new NSX will devalue our current early models or perhaps make them more in demand due to the craftsmanship and alluminum body and them not being mass produced.it has raised concerns with my mods plan.I feel it will cost me 25k in addition to my current mods to get my car to where I want it(total show and go)something I would enter at the shows and be proud of(well im proud of it already but you get my drift,I am planning some mods I dont belief anyone has attempted yet just for show .that would place my car in the 60k bracket.when you could buy a new one for that.I really would like to hear from all of you as to what you think will happen to the market price.even though its still really an unknown as to what honda really is up to in respect to the next gen
David
 
Originally posted by BadCarma:
do you think that such a deep price cut on the new NSX will devalue our current early models or perhaps make them more in demand due to the craftsmanship and alluminum body and them not being mass produced.

I don't think it will have much effect on the early models. Their prices have been fairly stable for the past 4-5 years. A nicely kept one will continue to be desirable - particularly as the miles pile up on many of them.

The recent ones may go down in price, though, just like the '97 which has already dropped quite a bit in the past 12-18 months.
 
Honda is so secretive. The salespeople don't have any inside knowlegde that the rest of us don't have. Basically, it's all rumors, and we should not think that just because someone works for the dealership and wears a tie that they should know any better than the rest of us. I would even be surprised if anyone other than perhaps the very top people at American Honda here in the US have any inside info on it.
 
Originally posted by lemansnsx:
each NSX costs Honda $110,000 to build meaning that they are losing on the order of $20K on each car.

Does anyone actually have any Factual information on what the NSX costs to build? I would be interested in knowing. $110K sounds WAY too high IMO as the first cars only cost 60K in 1991. The engine is supposed to cost 20K, so what is the rest worth?
 
I can believe the cost is high for today's NSXs but doubt Honda is building them at a loss. Look at the current volume and fixed cost of the plant to manufacturer the NSX. Labor was shifter over to the S2000 line using much of the sunk cost of the plant. I would suspect Honda is looking to get the investment out of the fix assets for the NSX before changing out to a new model that will require new assets to build.
 
As hejo indicates, there are very high fixed costs in building the NSX. The cost of the plant itself is one of them (and this is shared with other vehicles built there, the S2000 and Insight). Another is the development cost to design the NSX, which could very well be even more than the construction of the plant.

Let's suppose it cost Honda $1 billion for these fixed costs. (That's actually slightly low in the industry for a development budget on an all-new car platform with an all-new engine.) Let's also suppose it costs another $60,000 in additional raw materials and labor and other variable costs for each NSX that goes out the door. When a dealer pays Honda $78,198 for a new NSX to sell to a customer, does that mean that Honda "makes" $18,198 on each NSX sold? Not exactly. It means that Honda receives $18,198 to use towards the amortization of the fixed costs spent to bring the car to market. Accountants determine how those fixed costs get spread across production, and that determines how much of a net profit or loss is associated with each car built. For example, if that guesstimate of $1 billion is spread across a total production run of 20,000 NSXs, that means that each NSX absorbs $50,000 of the fixed costs. Thus the total cost of building each NSX is $110,000, and each one results in a net loss of $31,802. As hejo notes, Honda can afford to keep building the cars at a loss because the fixed costs are already spent, so each extra car built results in $18,198 in extra money that the company receives. Hope that makes sense.

Originally posted by NetViper:
$110K sounds WAY too high IMO as the first cars only cost 60K in 1991.

You're also forgetting inflation. The first cars sold for $60,600 at the end of summer 1990. (Actually, they sold for much more, but that was the MSRP.) Inflation alone would make that figure equivalent to $82,856 today. The MSRP is slightly more than that, but not by a whole lot.

[This message has been edited by nsxtasy (edited 07 July 2002).]
 
Not to put the discussion off topic but yesterday I was having a conversation with a friend of mine about the "real" cost of a Ferrari. We ended up on this:

In an italian car magazine they argued that Ferrari F1 program has a budget of 200 mio $.
About 50% of it is covered by sponsors and the remaining is paid by "Ferrari" (ok, we know that in reality it is FIAT Auto).
If you divide the F1-cost over the 4'000 produced cars per year you already have 25'000$ per car!

Ok, this is the COMPLETE advertising, prestige, heritage, ... everything they need to sell their cars and more. And it still influences in a positive way all the other FIAT brands: FIAT, Alfa Romeo and Maserati that all profit of this huge marketing campaign.

I think 25'000$ of advertising (and you do not see any Ferrari advertising outside the related F1 circus) is quite a lot of money!
eek.gif


PS: it would be fair to add that a part of the R&D they do for F1 is also used for road cars.
 
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