Wednesday, November 01, 2006

Is this what Detroit should do?

well, they cannot since they never built the prestige to begin with. But here is what got me thinking about this.

First some initial thoughts, from this BW article written in 2000 (bubble days).
Car sales may be sluggish in Europe overall, but German carmakers are gearing up for high times in the ultrapremium niche. Even Volkswagen now wants a piece of the action. The profit margin can be as dreamy as the new models: 30%, six times the industry average.

The article goes on to say
Even with the high margins, the market is so small that the contribution to a carmaker's bottom line is negligible. Analysts estimate that the Maybach, for example, will generate minimal profits for DaimlerChrysler.
So here we are in 2006 and my blog reading today lead me to this,
The star car is their $450,000 SLR McLaren which was beast on the race track (0-60 in about 3.5 secs) of yours truly in the drivers seat. I asked how many they were making of the "limited" release. Given the price tag, I would have assumed a couple hundred cars. They are making 7,000. That's right. They are planning on selling 7,000 $450,000 cars. G
Do the math.... Yup you read it right. If there was no typo in the original blog post, then Mercedes plans on making 3.15 Billion $ from the sale of the SLR Mc Laren. Granted I don't know if this is a 5 year/10 year plan on what... But this translates to 1 Billion $ in profits for Mercedes, conservatively speaking. Heh... so is there a Detroit manufacturer that can ride the Bubble like this? and more importantly what have we learnt from our 2000 experiences?...

Of course we need the gratuitous picture ;)

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