"Ed Huntress" wrote in message
...
On Thu, 13 Jun 2013 15:18:02 +0000, passerby
wrote:

replying to jon_banquer , passerby wrote:
jonbanquer wrote:
"Industry analysts have estimated it actually costs GM as much as
$75,000 to build each Volt, or nearly twice the base price."

Find the right analyst and s/he will estimate you anything all the way
right up to the point that *you* want to make. What is so incredibly
different in Volt from, say, Prius which costs $25,000 (to the customer)
and Toyota is making profit on it? Volt has a larger and different
technology battery, so it probably costs $3K more. OK, let it be $5K more,
but still, what would explain the incredible $50K difference in the
alleged estimate?

If the estimate has any relation to reality, it most likely does not take
into account economy of scale that hasn't yet started to show since the
sales are not very high and the model is relatively recent. Toyota started
selling Prius in 1997 and announced making first profit in 2001 after
75,000+ were sold. Gotta give it time, I'm sure GM understands that.

Eisenstein, the reporter of that article Jon quoted, just says
"industry analysts say." Although Eisenstein knows what he's talking
about, you can do the accounting on this kind of thing in a variety of
ways.

In this case, the "analysts" appear to be Sandy Munro, who was quoted
in a Reuters article from which Eisenstein likely got his "analyst"
quote:

http://www.reuters.com/article/2012/...88904J20120910

You can't do accounting that way and get a result that makes any
sense. It's good for producing a corporate balance sheet or P&L, but
it doesn't tell you anything about the cost of manufacturing a car.

Bob Lutz says the story is nonsense:

"The statement that GM "loses" over $40K per Volt is preposterous.
What the "analyst" in whom poor Ben Klayman [one of the authors of the
Reuter's piece] placed his faith has done is to divide the total
development cost and plant investment by the number of Volts produced
thus far. That's like saying that a real estate company that puts up a
$10 million building and has rental income of one million the first
year is "losing" 9 million dollars, or several hundred thousand per
renter."

Good point. What a lot of bull****.


GM also released a statement saying something close to that, but it's
corporate PR, so take it with a grain of salt.

Doing accounting in the car business is difficult, especially for a
new type of vehicle that encountered huge research and development
costs. The only reliable thing you can work with is the marginal cost
of building the last car, or the next one -- they should be the same.
I'm sure that Lutz is well aware of that marginal cost.

Then you have to decide how you're going to amortize the R&D. And that
could be something you do over years for tax and stockholder purposes,
or a decade or more if you're doing corporate planning.

Economics: the mystery science, where perpetual motion is allowed.
Economics gives mathematics a bad name.
Hey, why bother with fukn math, when you can just handwave??

Economics is little more than game theory with a generous sprinkling of The
Mind****, where one side can read the cards of the other side, but the side
getting their cards read don't know it. Cuz, well, they're too busy
getting mind****ed, and, well, too busy ****ing each other -- crabs in a
barrel, donchaknow.

Still, even with one-sided game theory, you still gotta have players. GM
somehow lost their players. Cuz, well, even mind****ed assholes getting
their cards read have enough functioning brain cells to know enough to buy a
Prius, which is 1/2 the price of a Volt, and gets 20-30% better overall gas
mileage.

All Hail the AngstMobile:
A (cheaper) Leaf with a ****ty li'l genset -- no transmission, no
planetary gears, no multiple clutches, nuthin ceptin batts, a genset, 4
wheels, and a cupla small motors.
And A/C, of course.

You know, I tried to submit this to fuknNissan, but you can't send **** to
them unless you have a twitter account?? WTF????
--
EA




--
Ed Huntress