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Discussion Starter #1
Okay... Let's say I end up paying $43K out the door for a bare-bones Elise from my dealer. Can someone break down the, "Who gets paid", aspect of car buying..

How much does:

Dealer make=

Lotus Make=

Any other party?=


Thanks,

EG
 

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Don't forget Lotus USA, they are a separate entity.
 

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How many accountants does it take...
 

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Why does this matter? None of these breakdowns will translate into a different price to you.
 

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Here is what I do know...

Lotus (Hethel) makes almost nothing on the Elise, and supposedly, if you buy a base model, no extra price paint, not options... they lose money.

Lotus USA makes an incredibly slim margin. I was given a number that boggles my mind.

The dealers? They are operating on a very slim margin also. I don't know what it is, but I have been told it's slim for cars in this price range.

I understand that Lotus and Lotus USA are trying to resurrect the company by the new markets and new cars and are thinking in terms of the long term. They were never intending on giving the cars away, but the slide of the dollar to the pound was not something they could control.
 

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Patricko said:
How many accountants does it take...
I left that one a little to vague;)

I was going for humor. It is not very easy to determine the true cost.
 

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Randy Chase said:
Here is what I do know...

Lotus (Hethel) makes almost nothing on the Elise, and supposedly, if you buy a base model, no extra price paint, not options... they lose money.

Lotus USA makes an incredibly slim margin. I was given a number that boggles my mind.

The dealers? They are operating on a very slim margin also. I don't know what it is, but I have been told it's slim for cars in this price range.

I understand that Lotus and Lotus USA are trying to resurrect the company by the new markets and new cars and are thinking in terms of the long term. They were never intending on giving the cars away, but the slide of the dollar to the pound was not something they could control.


Well I'll be helping them out a little. I'm getting it loaded with everything including lifestyle paint.
 

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Discussion Starter #8
Willy B said:
Why does this matter? None of these breakdowns will translate into a different price to you.

Jeezzz.... I don't care about what it costs me... I am interested on the basics of how car companies/dealers make money. I've always wondered and then went to search it out on the internet and found lots of frivolous information. I was hoping someone had some insight on the $$ breakdown... just curious.....
 

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Esprit said:
Jeezzz.... I don't care about what it costs me... I am interested on the basics of how car companies/dealers make money. I've always wondered and then went to search it out on the internet and found lots of frivolous information. I was hoping someone had some insight on the $$ breakdown... just curious.....
Check www.cars.com to see the invoice cost for most cars.

As for the basics of how a car company makes money...there is nothing basic about it, it is a very complicated business.
 

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I'm impressed with the pricing of the Elise. It's very reasonable and I think it would have a strong market if it were priced in the 50's. I know many will comment about the lack of luxury and the small engine. But you have to admire the design and construction. It's a sophisticated, well designed, hand-built sports car. It's impressive that loaded the Elise will cost you less than $50,000.

I assume Lotus's strategy is to break back into the sportscar market by getting the attention of the enthusiast and perhaps some free advertising from road racing, enthusiasts, etc. This should position Lotus well to bring back higher end sports cars. Assuming a number other variables like, satisfactory reliability, safety, dealer support and availability of parts.

We should also consider that a majority of our dealers are use to selling higher-end cars. I've personally appreciated the incredible service I've received from the dealer I've ordered an Elise from. To some degree you have to admire their ability to adapt to the higher volume lower profit sales. And perhaps it also explains why some dealers have chosen to sell some cars at a higher price, which is where Lotus could have priced the car at in the first place. I just hope I get mine before Lotus is forced to raise the price and close the margin.
 

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Every quote I can find from Lotus management suggests that they have no intention of raising the price soon. I believe the latest Lotus Ltd newsletter had an interview with Mr English stating the same. Always with the caveat of 'Unforseen Circumstances', but the message is that they know the sweetspot to get the volumes they want.

We're an unusual bunch here -- less price sensitive than most. Someone less intense might have arbitrary $40 limit. They could have raised MSRP already, but instead squeezed the options and paint out of the car to keep it there.

When you can get a G35 Coupe, 6MT, fully laden with NAV, Sat radio, LSD, the werks for less than the Elise, they're putting an aweful lot of faith in the American car shopper to know the difference.

I used to think the price was going up too, but the more you look at the big picture they're aiming for, it really doesn't make much sense. I'd guess it will come with the ('06?) redesign when the exemptions expire.
 

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But Ground, the buyers who are looking at the cars you list with all the goodies would NEVER give an Elise a second look as a possible purchase, the only thing these cars have in common are that they have four wheels, and an engine.

Lotus is looking for the .00001% of the US buying public that's enthusiast oriented. I think as long as they try to stay in that theyll do well.

I think something that would be cool for them to do is another Lotus Carlton project. They took a limited run of GM Europe Omegas(?), tweaked the car performance suspension, etc. the cars were very fast for the period.

Chris
 

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I do not know the profit margin for the MFG. but dealers have a set invoice price in addition to this you have a credit of a certain dollar amount ranging from $300 to $1800 this is refered to as dealer holdback. Here is a link to dealer holdback.

http://www.edmunds.com/advice/incentives/holdback/index.html[/URL]

M.S.R.P. $25,000
INVOICE $22,000
HOLDBACK $965
$3,965

Most dealers have to pay several other fees out of this money for regional advertising and such.
 

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Discussion Starter #16
Thanks CHRISN!

How much does it cost to make the Elise.. ex: Chassis + Powertrain costs Lotus $15K?? etc...

Anyone know an approx $ figure?

EG
 

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Well...

If Toyota and its dealers are making boatload of money selling the Matrix XRS (Same 2ZZ Engine and Tranny as the Elise) for $19k... which has more features, materials, and more car than the Elise for $40k.. I'm sure Lotus is making a killing.

I personally can't believe at all that Lotus is losing money.
 

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nyoneway said:
A brand new 2ZZ engine from the Dealers is $6700. The tranny cost about $1700

http://www.trademotion.com/partloca...ake=34&model=Celica gts&year=2002&catalogid=1

http://www.trademotion.com/partloca...ake=34&model=Celica gts&year=2002&catalogid=1

Now minus the dealer profit of say 30% + Lotus bulk discount of maybe 10%, it is reasonable to assume the cost for the engine and tranny to be about $5000 for each car.

I personally believe that the cost to make the Elise will not be more than $20k.
There are engineering and development costs to be recouped as well.
 

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Keep in mind that Lotus Cars USA was one of the most profitable parts of Lotus during the past few years. LCU made over $1M in profit on sales of 120 Esprits, parts, and some service. LCU has to pay federal taxes on that profit.

With the devaluation of the dollar, Lotus Cars Ltd. (UK) raised the price of the Elise to the US. This will make the UK more money, the US less money (and avoid paying Fed Tax on it), the dealers still have the same basic markup that they had when the car was in the planning stages.

There has not historically been a "holdback" with Lotus. The new management may have instituted one since Mr. Johnson left...
 
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