She's happy to
AO Platinum Member
Join Date: Jan 2001
Location: United Kingdom
Re: Vehicle Engineering,,tricks the designers play
this is an interesting subject. I would love to have a chat with a motor industry economic expert, as I've always wanted to understand the profit % made by the dealer v the profit % made by the service dept.
Let's take Toyota. As far as I'm aware, a Corolla is not a hugely expensive car to buy. Ok, it's boring, but let's ignore that for a moment. And is has the kit that you'd expect a car like that to have. Sure, it's no Rolls-Royce, but it's ok. But there's every chance that even when it hits 60k, the warranty claims will be peanuts. But more than that, every service will only be oil/oil + filter change, air filter, a gromit here etc.
Now, this is a car that never goes wrong, and isn't hugely expensive to buy/run/service or repair. But each year, Toyota has to pay rising rent (for its dealership), rising salaries for sales/technicians/training/diagnostic kit.
I want to understand where they money comes from? Ok, maybe labour rates in Japan are cheaper (although I doubt that); but if profit can't be gleaned from fleecing the customer via servicing, then how does Toyota manage to be so profitable? Is it just through sales volumes/profit margin alone?
A driver is always faithful to a car that's always faithful to its driver.
Sometimes in the darkest hour, love comes shining through.
Then it doesn't seem so far from me to you.