The BMW UUC Digest Volume 3 : Issue 425 : "text" Format Messages in this Issue: Re: Aston Martin sold (OT) Re: Aston Martin sold (OT) Run Flat Tires Re: Run Flat Tires <E36 M3> Rear Shock Tower Subframe Failure Re: Aston Martin sold (OT) Re: Aston Martin sold (OT) Re: Run Flat tires Aston Martin profitability - of not (OT) Re: Aston Martin profitability - of not (OT)
---------------------------------------------------------------------- Date: Wed, 14 Mar 2007 10:08:39 -0400 From: Dennis Liu <[EMAIL PROTECTED]> To: "'Ben Keyes'" <[EMAIL PROTECTED]>, <bmwuucdigest@uucdigest.com> Subject: Re: Aston Martin sold (OT) Message-ID: <[EMAIL PROTECTED]> Ben Keyes wrote: >if they sell ~7000 cars/year & make $10k per car that's $70M in profits. >that margin actually seems sorta low relative to the ~$200k transaction price for many of their models, so if it's more in the 10% range they're close to $150M in profits/year. >not a bad return on the money especially when you figure in the manufacturing assets they get as part of the deal. ========== Ben, just curious. Where did you get the $10k gross profit per car number? I've not seen it before. Vty, --Dennis ------------------------------ Date: Wed, 14 Mar 2007 07:53:44 -0700 (PDT) From: Tammer Farid <[EMAIL PROTECTED]> To: bmwuucdigest@uucdigest.com Subject: Re: Aston Martin sold (OT) Message-ID: <[EMAIL PROTECTED]> Given the line he followed it up with, I'd say that number came from somewhere between his lower back and hamstrings. ;-) -tammer --- Dennis Liu <[EMAIL PROTECTED]> wrote: > Ben Keyes wrote: > > >if they <snip> make $10k per car that's > $70M in profits. > >that margin actually seems sorta low relative to the > ~$200k transaction > price for many of their models, so if it's more in the > 10% range they're > close to $150M in profits/year. > ========== > > Ben, just curious. Where did you get the $10k gross > profit per car number? > I've not seen it before. ____________________________________________________________________________________ Be a PS3 game guru. Get your game face on with the latest PS3 news and previews at Yahoo! Games. http://videogames.yahoo.com/platform?platform=120121 ------------------------------ Date: Wed, 14 Mar 2007 08:00:33 -0700 (PDT) From: kjk <[EMAIL PROTECTED]> To: bmwuucdigest@uucdigest.com Subject: Run Flat Tires Message-ID: <[EMAIL PROTECTED]> Tammer wrote: "Or you could check your tire pressures weekly." Ummm, these would be like nail-in-the-tire flats not low air pressure. Was that not obvious? Kevin Kelly '91 M5 ____________________________________________________________________________________ Get your own web address. Have a HUGE year through Yahoo! Small Business. http://smallbusiness.yahoo.com/domains/?p=BESTDEAL ------------------------------ Date: Wed, 14 Mar 2007 08:59:26 -0700 (PDT) From: Tammer Farid <[EMAIL PROTECTED]> To: bmwuucdigest@uucdigest.com Subject: Re: Run Flat Tires Message-ID: <[EMAIL PROTECTED]> No, it wasn't obvious to me since you stated it was tough to visually see flats. My mistake. The slow-leakers are the worst, when that nail is stuck in and only losing 2 or 3 psi/week. -tammer --- kjk <[EMAIL PROTECTED]> wrote: > Tammer wrote: > > "Or you could check your tire pressures weekly." > > Ummm, these would be like nail-in-the-tire flats not > low air pressure. Was that not obvious? ____________________________________________________________________________________ Don't get soaked. Take a quick peek at the forecast with the Yahoo! Search weather shortcut. http://tools.search.yahoo.com/shortcuts/#loc_weather ------------------------------ Date: Wed, 14 Mar 2007 17:25:17 -0400 (EDT) From: "C. Craig Eller" <[EMAIL PROTECTED]> To: BMW UUC Digest <bmwuucdigest@uucdigest.com> Subject: <E36 M3> Rear Shock Tower Subframe Failure Message-ID: <[EMAIL PROTECTED]> I just wanted to convey a collective word of thanks to everyone who replied to my email. I'm back in town now and was able to nurse the M3 to my local body guy without incident. It was quite a sobering experience driving in the right lane of I-95 at the speed limit. Essentially, the springs are so stiff on the M3, I felt they could take the short hop, and they did. I was also concerned that the flat bed driver might not be too happy when I told him he would not be able to cinch the back end down. Right now, I'm waiting to hear if the shock tower is damaged or its just a rear shock mount issue. I'm going to order a set of Ground Control RSMs regardless. I'm hoping that is what is necessary to prevent this from happening on the left side. Once again, thanks for the collective wisdom. A guy could not ask for a better support group. If only we had such a distinguished group of experts with this type of track record for dealing with women, we could charge a hefty annual subscription. Best wishes. Craig Eller BMW CCA Everglades Chapter 97 ///M3 Sedan ------------------------------ Date: Wed, 14 Mar 2007 21:56:48 -0400 From: "Ben Keyes" <[EMAIL PROTECTED]> To: bmwuucdigest@uucdigest.com Subject: Re: Aston Martin sold (OT) Message-ID: <[EMAIL PROTECTED]> Clarence wrote: > Ford is lucky they were able to get some, if not all, of their money back. not sure how much Ford paid for the initial 75% & then the rest of the company in '87 & '93, but the money put into the new factory, the development (or paying Lotus to do the development, I forget how much of it was done in-house) of the aluminum vehicle architecture, engine development, etc are probably more than what it was sold for but it's probably best for both sides of the equation - we get some cash, they get autonomy and a chance to perhaps grow in directions that perhaps they weren't allowed to go and or were preventing other parts of the family (Jag most obviously, witness the very favorable comparison between the XKR & the AMV8 from Top Gear recently) growing where they might want to. > Didn't BMW pay to have Rover taken off their hands after BMW had > pumped in 8-10 billion to keep Rover afloat? yep. they gave away Rover to the Phoenix investment group in the UK who eventually drove it into the ground. > And then Rover collapsed > anyway with corporate China swooping in to pick over the bones. it was never really viable in the past anyway, so no surprise that it failed when it was left w/o anyone to fund development. I'm sure the Chinese will enjoy their Rover 75s and maybe Nebraska or wherever it is will end up building "MGs" someday. > Now DCX is hinting disgorgement of the Chrysler Group. it would be the messiest corporate take-over/buy-out in history I suspect, but it might happen, might not. it's probably completely a function of how much pressure the VW board gets to sell Chrysler off if it continues to lose money & be poorly managed with stale products. > And Lotus may be the market (again). I was under the impression that Proton (which has owned Lotus for quite a while, seemingly w/o managing to meddle too much but also not exactly pumping money into it either) was in the process of being sold to VW, but that's apparently not quite a done deal : http://en.wikipedia.org/wiki/Proton_%28company%29 certainly if VW were to buy Proton (primarily to gain manufacturing capacity in SE Asia with having to build it) they would keep Lotus and probably imagine they could fold them into whatever Lambo/Audi/etc will become but could likely manage to screw it up too, since I'm sure Ferdinand Piech has a master plan for it somehow. > What we are seeing is current management, and economics, tidying up the > problems caused by the super egos of previous management. if you mean Jac Nasser, then perhaps some of it falls at his feet, but there were years & years & years of chances to make Jag work which haven't turned out so well, both before & after his time. the rest of our problems have very little to do with egos, in fact had there been a few strong egos able to make decisions (the layers of mgmt & who can & can't approve what are legendary & pathetic) there might not have been some of the weak product decisions and lack of foresight which have caused problems. > Speaking of management, Ford needs to hire the guys VW pushed out to > clean up Jag. "guys" would be Wolfgang Bernhard and maybe Thomas Bscher but the former is know for more mass-market smartness & the latter is a way premium brand kinda guy who really doesn't need to work anyway, so I dunno whether either would have interest. nothing you start doing today or tomorrow or next year is going to "save" Jag or Ford, it's about what was decided in the past & how the plans in place now are executed. GM didn't become magically delicious overnight when they brought on Bob Lutz (and I'd argue they still don't stay crunchy in milk nearly long enough to be out of the woods yet) it took plenty of time. they're likely to survive and stop the bleeding a bit - with proper product guidance they're getting a much higher hit or hard ground-out ratio that their past strikeout and double-play grounding into past. and yes, I made up the $10k (or $20k) number for profits for A-M but if you look at whatever Porsche claims to make per vehicle, it's not too hard to imagine those margins on their very high sticker prices. Ben will have to talk to one of the directors about his time in Rover car product development sometime ------------------------------ Date: Wed, 14 Mar 2007 23:07:53 -0400 From: "bill matthews" <[EMAIL PROTECTED]> To: <bmwuucdigest@uucdigest.com> Subject: Re: Aston Martin sold (OT) Message-ID: <[EMAIL PROTECTED]> > -----Original Message----- > From: [EMAIL PROTECTED] > [mailto:[EMAIL PROTECTED] On Behalf Of Ben Keyes > Sent: Wednesday, March 14, 2007 9:57 PM > To: bmwuucdigest@uucdigest.com > Subject: Re: [UUC] Aston Martin sold (OT) > > > Speaking of management, Ford needs to hire the guys VW > pushed out to > > clean up Jag. > > "guys" would be Wolfgang Bernhard and maybe Thomas Bscher but > the former is know for more mass-market smartness & the > latter is a way premium brand kinda guy who really doesn't > need to work anyway, so I dunno whether either would have > interest. nothing you start doing today or tomorrow or next > year is going to "save" Jag or Ford, it's about what was > decided in the past & how the plans in place now are executed. > GM didn't become magically delicious overnight when they > brought on Bob Lutz (and I'd argue they still don't stay > crunchy in milk nearly long enough to be out of the woods > yet) it took plenty of time. they're likely to survive and > stop the bleeding a bit - with proper product guidance > they're getting a much higher hit or hard ground-out ratio > that their past strikeout and double-play grounding into past. I think Wolfgang is off the table for anyone except Chrysler (minus Mercedes). http://www.autonews.com/apps/pbcs.dll/article?AID=/20070314/REUTERS/70314001 /1128/BREAKING&refsect=BREAKING Bill Matthews Cerberus hires Wolfgang Bernhard to advise on Chrysler bid Automotive News / March 14, 2007 - 5:00 am / UPDATED: 3/14/2007 6:47 A.M. FRANKFURT (Reuters) -- Buyout firm Cerberus Capital Management LP has hired the Chrysler group's former COO to advise it on a possible bid for the U.S. carmaker, a source familiar with the matter said today. Turnaround expert Wolfgang Bernhard, a prime author of Chrysler's short-lived earnings rebound earlier this decade, has signed up with Cerberus, boosting its chances in the scrum to buy the Chrysler group, the source said. Cerberus declined comment. Cost-cutter Bernhard, 46, most recently worked at Volkswagen before leaving in January amid a management reshuffle. He joined VW after DaimlerChrysler unexpectedly ditched him in 2004 just before he was due to run its Mercedes Car Group premium arm. German labor leaders at DaimlerChrysler had opposed his arrival in Stuttgart. Few industry executives know Chrysler as well as Bernhard, who worked in Detroit with then-Chrysler chief and now group CEO Dieter Zetsche to close six Chrysler factories and cut its workforce by a fifth. Cerberus is among a handful of firms that have emerged as front runners to bid for Chrysler, a source familiar with the matter told Reuters. Another private equity consortium -- The Blackstone Group with Centerbridge Partners -- is also in the running, as is Magna International Inc., Canada's biggest auto parts maker, the source said. <other yada^3 snipped> ------------------------------ Date: Wed, 14 Mar 2007 21:09:44 -0500 From: "Bill Mitchell" <[EMAIL PROTECTED]> To: <bmwuucdigest@uucdigest.com> Subject: Re: Run Flat tires Message-ID: <[EMAIL PROTECTED]> My take on run-flats: 1. Cost way more than ordinary performance tires 2. Cannot be repaired, so they are a throw-away tire. Thus, costing even more. 3. Many tire shops are not equipped to deal with them, takes a special machine to mount/dismount them. 4. Takes a special wheel, thus you cannot mount regular tires on run-flat wheels. 5. see no. 1. Bill M. 3 Bimmers, no run-flats ------------------------------ Date: Wed, 14 Mar 2007 23:35:12 -0400 From: Dennis Liu <[EMAIL PROTECTED]> To: <bmwuucdigest@uucdigest.com> Subject: Aston Martin profitability - of not (OT) Message-ID: <[EMAIL PROTECTED]> Ben Keyes wrote: >if they sell ~7000 cars/year & make $10k per car that's $70M in profits. >that margin actually seems sorta low relative to the ~$200k transaction price for many of their models, so if it's more in the 10% range they're close to $150M in profits/year. >not a bad return on the money especially when you figure in the manufacturing assets they get as part of the deal. I then asked, "Ben, just curious. Where did you get the $10k gross profit per car number? I've not seen it before." Ben replied: >and yes, I made up the $10k (or $20k) number for profits for A-M but if you look at whatever Porsche claims to make per vehicle, it's not too hard to imagine those margins on their very high sticker prices. =============== A few things. Forgive me if I come across pedantic. First, Porsche has never publicly released gross margins on its vehicles. In fact, no one does, AFAIK. It's a fairly meaningless number anyway, as there are so many different ways to fudge it, you can make the the gross margin as big or as little as you want. Don't confuse gross profits from manufacturing with overall profitability. Sure, it's easy to say that every Tahoe sold can generate $10k or $15k in gross profits for GM; that's common wisdom (though GM doesn't give out hard figures) because an analyst can assume that the development costs for the Silverado/Tahoe platform are X, the manufacturing costs are Y, make some other assumptions, and come to that figure. And sometimes analysts or reporters will just do the math backward; take the total earnings from the announcement, and divide it by the # of cars sold to arrive at a thumbnail sketch of "profitability per vehicle." That's a good number to banter to the public about. But using a total of the "gross margin" on every car you make to ARRIVE at overall profitability is ass-backwards. What I suspect Ben is referring to, with respect to Porsche, is their recent announcement on overall profitability (which kept Porsche as the most profitable automaker in the world) - Porsche earned $1.36 billion in the second half of last year (6 month period). Porsche sold 39,750 vehicles in that time period, so, simplistically, that's a gross profit of $32,700 per vehicle. Wow - hugely impressive, no? No. That's because Porsche made a lot of money due to the fact that it owns 27.4% of VW, which stock has been on a tear as of late. So it revalued that holding, which added to its earnings report. AND Porsche also made a bunch of money by stock-price hedging VW shares, and which Porsche hit it out of the ballpark (it helps when there is common family ownership, ahem, no insider trading of course). Added together, according to analysts, those two one-time earnings could be almost as much as the entire profits being reported, if not more than that. Which is why Porsche stock dropped after this announcement (in previous years, Porsche kept up its profitability due to profits from currency hedging). Back to Aston Martin - is it possible for Aston to have made $10k or $20k per car sold, in overall profits? Sure. But that's pure and utter speculation. That is every bit as valid (or invalid) as reasoning, well, Jaguar should have made $10k or $20k in profits for every car that it sold, because its cars aren't cheap and it shares technology with other Ford products so it can't be expensive to make, so that sounds about right, so I'll use that number to calculate overall profitability at Jaguar. We know that is untrue, of course, because Jaguar is a massive black hole for Ford. So one should be careful when making these back-of-the-envelope calculations and assumptions. Just because the MSRP on the Aston Martin Vanquish was over $200k (their average selling price is much lower than that, BTW, because the Vantage V8, their volume model, is in M6 territory, not Ferrari territory) does not mean that you should assume profitability of 10% or 20%. Oh, and if I could buy a business that earned $150mm annually for only $925mm, I'd snap it up in a heartbeat. That's a 16% annual return - not too shabby, and easily financed. Lastly, to add some BMW content, if I had to guess the most profitable automaker in the world, solely from automotive operations (leaving out currency hedges, financing arms, etc.), I'm reasonably sure that it'd be BMW.... Vty, --Dennis ------------------------------ Date: Thu, 15 Mar 2007 00:24:16 -0400 From: "Ben Keyes" <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] Cc: bmwuucdigest@uucdigest.com Subject: Re: Aston Martin profitability - of not (OT) Message-ID: <[EMAIL PROTECTED]> first off, work in product development finance, so I'm well aware of gross vs net vs fully accounted vs whatever margins & profits. second, Porsche has crowed about their profits for quite a while beyond their stock gains from VW in the last year or so & good old Wendelin Wiedeking is apparently some sort of automotive demi-god (in his own mind) so it must be true :-) third, based on the price of options on Porsches - $750 to paint the rocker panels, $2k for leather switch panels, $270 to emboss crests on the headrests, $355 leather dome lamp cover (!), $2700 wood door pieces or switch panels, yada^3 - I can very easily imagine that they'd clear $20k on lots of cars. also, there's got to be an easy additional $20k in margin on a Cayenne TT vs the base V6 car given that there's not $40k worth of additional cost in the motor & bigger brakes & whatever else is different from the base models. fourth, I dunno what the actual transaction prices are for AM models but I don't think making 10% margins on something is crazy when it's that pricey (and I'm sure there are all sorts of fun pricey options you can get from AM as well). having said that, I recall Nissan boasting about having the highest operating margins in the industry a few years ago & it was something like 9%, so perhaps 10% is a bridge too far for little ole Aston. nonetheless, the people who were in the bidding were pretty serious about it, so it might not be that crazy. I agree that BMW is probably the most profitable, but I wouldn't discount hedging & all the rest as a component of running a smart business. I still think Porsche is probably the best based on margins per vehicle. Ben On 3/14/07, Dennis Liu <[EMAIL PROTECTED]> wrote: > > A few things. Forgive me if I come across pedantic. > > First, Porsche has never publicly released gross margins on its vehicles. > In fact, no one does, AFAIK. It's a fairly meaningless number anyway, as > there are so many different ways to fudge it, you can make the the gross > margin as big or as little as you want. Don't confuse gross profits from > manufacturing with overall profitability. Sure, it's easy to say that every > Tahoe sold can generate $10k or $15k in gross profits for GM; that's common > wisdom (though GM doesn't give out hard figures) because an analyst can > assume that the development costs for the Silverado/Tahoe platform are X, > the manufacturing costs are Y, make some other assumptions, and come to that > figure. > > And sometimes analysts or reporters will just do the math backward; take the > total earnings from the announcement, and divide it by the # of cars sold to > arrive at a thumbnail sketch of "profitability per vehicle." That's a good > number to banter to the public about. But using a total of the "gross > margin" on every car you make to ARRIVE at overall profitability is > ass-backwards. > > What I suspect Ben is referring to, with respect to Porsche, is their recent > announcement on overall profitability (which kept Porsche as the most > profitable automaker in the world) - Porsche earned $1.36 billion in the > second half of last year (6 month period). Porsche sold 39,750 vehicles in > that time period, so, simplistically, that's a gross profit of $32,700 per > vehicle. Wow - hugely impressive, no? > > No. That's because Porsche made a lot of money due to the fact that it owns > 27.4% of VW, which stock has been on a tear as of late. So it revalued that > holding, which added to its earnings report. AND Porsche also made a bunch > of money by stock-price hedging VW shares, and which Porsche hit it out of > the ballpark (it helps when there is common family ownership, ahem, no > insider trading of course). Added together, according to analysts, those > two one-time earnings could be almost as much as the entire profits being > reported, if not more than that. Which is why Porsche stock dropped after > this announcement (in previous years, Porsche kept up its profitability due > to profits from currency hedging). > > Back to Aston Martin - is it possible for Aston to have made $10k or $20k > per car sold, in overall profits? Sure. But that's pure and utter > speculation. That is every bit as valid (or invalid) as reasoning, well, > Jaguar should have made $10k or $20k in profits for every car that it sold, > because its cars aren't cheap and it shares technology with other Ford > products so it can't be expensive to make, so that sounds about right, so > I'll use that number to calculate overall profitability at Jaguar. We know > that is untrue, of course, because Jaguar is a massive black hole for Ford. > So one should be careful when making these back-of-the-envelope calculations > and assumptions. > > Just because the MSRP on the Aston Martin Vanquish was over $200k (their > average selling price is much lower than that, BTW, because the Vantage V8, > their volume model, is in M6 territory, not Ferrari territory) does not mean > that you should assume profitability of 10% or 20%. > > Oh, and if I could buy a business that earned $150mm annually for only > $925mm, I'd snap it up in a heartbeat. That's a 16% annual return - not too > shabby, and easily financed. > > Lastly, to add some BMW content, if I had to guess the most profitable > automaker in the world, solely from automotive operations (leaving out > currency hedges, financing arms, etc.), I'm reasonably sure that it'd be > BMW.... > > Vty, > > --Dennis > > Search the ARCHIVES:http://www.mail-archive.com/bmwuucdigest@uucdigest.com > > > __________________________________________________________________________ > In memory of Michel Potheau - friend, enthusiast, founder of the BMW CCA. > > UUC Motorwerks - BMW Performance Fine-tuning and home of the Ultimate > Short Shifter - accept no substitutes! > 908-874-9092 . http://www.uucmotorwerks.com > ------------------------------ End of [bmwuucdigest] digest(10 messages) **********
