V8 Ford Mustangs Going Cheap

[Rory]

It's rarer than you might think. For a start in UK and Europe paying for private healthcare of car production workers is rare.

That's true, although of course in Europe (vs the US) employers are paying much higher social costs. But then nothing once employees retire.

For a second, on pensions, for past retirees (claiming) to outnumber current employees usually only occurs where there have been large redundancy programmes and/or rapid automation.

I think I was thinking more of numbers of ex-employees, but of course they only become pensioners once they retire. I guess longer life expectancy exagerates this problem and presumeably the high number of pensioners is a transient thing that will pass over time (although could be a very long time).

 

[Bobby Dazzler]

even the oil companies and banks that make billions in profit still tell you they operate at a loss.
if they are all losing money, and have been for a number of years then who is sustaining the industry?

I'm no expert but...

Banks that report losses - due to the credit crunch for example - aren't suggesting that they're operating at a loss.

What they're saying is that they've had to write of some bad debts as there is no way of recovering the amount of money lent, as borrowers default and fail to make payments.

Lenders package up loans and sell them on the money markets - some US lenders did this and included lending from the risky sub-prime mortgage market - and other financial institutions purchased them.

The purchaser of the packaged debt benefits if it makes a profit (which it should), but they carry the burden if it goes sour (which it has in many cases).

Therefore the organisation that owns the debt have to write of the value of the bad debts, and make provisions for anticpated losses, when managing and publishing their accounts.

That is fundamentally different to operating at a loss, which means that having aggregated all of their operations the net position is a loss, ie not even broke even, nevermind made a profit.

So whilst a bank might write-off £Xbn in bad debts and provisions, it simply reduces the profit generating from the rest of their businesses.

This is not unusual. It's simply part of the cost/benefit analysis that banks do, and the reason for credit scoring and the like in the personal market - to acknowledge some debts won't be repaid, even if repossessions minimise the actual loss to some degree.

What's different at the moment is that those losses are larger than usually might be the case.

 

[recycled]

is that not the same with the auto industry that claim they are losing millions apart from GM who obviously are?
Just packaged differently. sell the debt or finance to another company or another arm.write off some factories due to losses or high labour and move on.

 

[hawk20]

No I'm not.
I defy anyone to get a substantial discount from this price that will get it anywhere near the $16,000 mark. We are seeing links where 2007 vehicles are being advertised at $16999 and the selling dealer talks about sticking on 'Go faster stripes' but we are talking new.

I understand what your saying about only one lot of taxes but that whole issue is a minefield and I stand by what I said regarding when I researched this topic when thinking of buying a boat a very rough guideline was a straight comaparison of $ = £ after ALL the shipping, taxes and other expenses are taken into account. There are all sorts of registration costs.

Talk is always cheaper than action and I was always hearing about how cheap it was to buy a product but when you wave dollar bills in front of someone it all of a sudden works out quite expensive.

John

The link I put up are new cars only driven 300 delivery miles if I have read the ad correctly. £16,999.

 

[rf065]

This company offers 2007 Mustangs with delivery miles for from £16,999
The Internet Car Showroom
Used car dealer in: Hampshire, Hartley Witney
01252 845353
[URL]http://www.buyyourcar.co.uk/spec/ford/mustang/code/awb1528125.aspx[/URL]

Not the V8 model though, the programme quoted £13,000 for the V6 & £16,000 for the V8 which confirms they were talking second hand or around 2 year old cars. That £16,999 is for the V6.

Russ

 

[Rory]

Not the V8 model though, the programme qouted £13,000 for the V6 & £16,000 for the V8 which confirms they were talking second hand or around 2 year old cars. That £16,999 is for the V6.

Russ

And the car in the link says 2007 model.

Those cars will be under $20K in the US. I would think it easily possible to import for £13K, or £16-17K for the V8 (about $24K in the US for the 2007 model). So selling for £16,999 is perfectly reasonable.


I didn't see the 5th gear item. Maybe they were taking how much dealers could import the cars for, ie their *cost* price.

 

[rf065]

And the car in the link says 2007 model.

Those cars will be under $20K in the US. I would think it easily possible to import for £13K, or £16-17K for the V8 (about $24K in the US for the 2007 model). So selling for £16,999 is perfectly reasonable.


I didn't see the 5th gear item. Maybe they were taking how much dealers could import the cars for, ie their *cost* price.

The car in the link is a 2007 V6 with delivery miles for £16,999
The programme said you could buy a V6 for £13,000
You will never find a brand new or delivery miles only mustang for £13,000
so they were talking about used car prices. He even pointed to the car and said this is a 2006 model. This whole thread is misleading people who are assuming they were quoting prices for a new car when they clearly were talking about used cars at that price.

Russ

 

[recycled]

http://fifthgear.five.tv/jsp/5gmain.jsp?lnk=480

 

[jeremytaylor]

This company offers 2007 Mustangs with delivery miles for from £16,999
The Internet Car Showroom
Used car dealer in: Hampshire, Hartley Witney
01252 845353
http://www.buyyourcar.co.uk/spec/ford/mustang/code/awb1528125.aspx

That's the place alongside the M3, isn't it?

 

[glojo]

The car in the link is a 2007 V6 with delivery miles for £16,999
The programme said you could buy a V6 for £13,000
You will never find a brand new or delivery miles only mustang for £13,000
so they were talking about used car prices. He even pointed to the car and said this is a 2006 model. This whole thread is misleading people who are assuming they were quoting prices for a new car when they clearly were talking about used cars at that price.

Russ

As the saying goes, "If something appears to good to be true, the chances are it's to good to be true!"

The detail will always be in the fine print.

If we had to have a Mustang, then is this the way to go?

I have seen some very good documentaries about this company and the blurb is most impressive.

John

 

[hawk20]

Car making is a hazardous business and although it is possible to find some years when profits are made, there are also many years when profits are not -for some companies.

This from the Fiat Group website: -
In the past few years the Fiat Group underwent a restructuring and relaunch plan that laid the basis for the company’s future growth in industrial, financial and commercial terms. 2005 was the year of the turnaround with the Group posting a net income once again. Improvements continued throughout 2006, with the Automobiles Sector posting a positive full-year trading result for the first time since 2000.

And Fiat are one of the Giants.

Ford and GM have verged on the brink of bankruptcy and Fords sale of Jaguar (loss making for years) was partly to help with its debt mountain.

At the time when MB sold Chrysler it was doing so badly they had to pay someone to take it away. This from the Press at the time: -
The future of Chrysler has been in the balance recently as it battled against huge losses that hit $1.5bn last year.

When Ford announced plans to sell off most of its Premier Automotive Group ( a regular loss maker) it contained Aston Martin (now sold) Land Rover and Jaguar (both sold) and Volvo. The BBC report at the time said:-

"
The news comes as Ford undergoes a significant restructuring scheme in a bid to counter losses.
The firm posted a loss of $282m (£141m) for the first three months of 2007, which was nonetheless less dramatic than the $1.4bn loss recorded during the same period the year before.
Stiff competition from Asian firms has caused trouble for US-based Ford - and other US firms - as buyers move away from gas-guzzling models.
Analysts have wondered for some time what Ford might do with Land Rover and Jaguar, neither of which has performed well.
Both firms are part of the Premier Automotive Group (PAG), as was Aston Martin.
Ford acquired Jaguar in 1989 and Land Rover in 2000.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/6741809.stm

Published: 2007/06/11 22:07:12 GMT
And for those who think car makers (other than Porsche) make vast profits and/or build cars for very low costs these figures may be of interest: -
CAR PROFITS
Porsche makes an astounding £14,173 average profit on every car it sells, according to a study carried out by B&D Forecast and printed in German newspaper Welt am Sonntag. The study shows that Porsche's per-car profits dwarf those of any other major manufacturer. BMW, for example, earns £1,619 average profit per car; although it should be remembered that BMW manufactures in much higher volumes than Porsche. Audi nets a comparatively small £800 profit per car, whilst very high-volume manufacturers like Volkswagen and Chrysler make £202 and £455 respectively.

 

[Dryce]

Which works out ok if you never fall sick as it is premium related

Or don't become pregnant!

It also helps not to be unemployed. Here if you lose your job you don't lose your health benefits.

 

[Ade B]

Interesting thread, bit off topic but:

"Most house built since the 1920s have wood-frame construction"

To be fair lots of the cheepo flats being built in the UK are just made from plywood or osb on wooden frames.

Quickness and cheapness vs longevity and quality.

Nothing wrong with timber buildings, been a few around for a long time

Scandinavia, Germany, Switzerland, all have a fine tradition of timber construction. They don't need to blow over at the slightest breeze.

Several of our current projects are timber framed, the perception of timber buildings being cheap and inferior is largely down to the cardboard houses built by most of the volume housebuilders in this country.

Interestingly, many brick built Victorian and Edwardian buildings we have worked on have shown serious construction flaws from poorly tied in floor structures, poor damp proof courses, botched alterations, even missing footings Probably more masonry buildings in London have structural movement issues due to difficult ground and poor design/workmanship. But masonry is best...

Unlike many things in life, with houses in the UK recently you definitely don't get what you pay for...

Anyway, Mustangs for £17k, would you want to buy one even at that price?


Ade

 

[Mr E]

And for those who think car makers (other than Porsche) make vast profits and/or build cars for very low costs these figures may be of interest: -
CAR PROFITS
Porsche makes an astounding £14,173 average profit on every car it sells, according to a study carried out by B&D Forecast and printed in German newspaper Welt am Sonntag. The study shows that Porsche's per-car profits dwarf those of any other major manufacturer. BMW, for example, earns £1,619 average profit per car; although it should be remembered that BMW manufactures in much higher volumes than Porsche. Audi nets a comparatively small £800 profit per car, whilst very high-volume manufacturers like Volkswagen and Chrysler make £202 and £455 respectively.

Interesting......

There are some things that work in Porsche's favour that can't always translate across to "mainstream" OEMS:

1. They have a relatively iterative development cycle - model updates are just that, with lots of technology-share across a small base. OK, they've launched 3 new models in the past few years but very little "big bang" development work in their cycle.

2. Lean engineering - you only have to go back 20-odd years to find that Porsche nearly went bang. However, they turned this round through the introduction of what could be termed extreme lean engineering. This was backed by a very, very skilled workforce who could implement the rigour required. The problem (in the main, although books have been written on the whole thing) was the cost of fixing problems off the line, and a huge inventory. Fixing this drove down the cost and drove down the unit build time.

3. Premium branding - you'll always pay more for a Porsche.

On the LE topic - Toyota led the way here for years, and have built it into the tier 1 and tier 2 supply chains they use. It's so endemic in their systems that the main output now is quality - it's also handy that getting the quality right has a big impact on manufacturing cost (similar to the 1:10:100 ratio of fixinf software in build:testroduction). The US/European rationale for LE has almost always been cost reduction (tbh, that's the reason Porsche got into it) and they've never got it quite right.

Back to topic - wouldn't have a Mustang, unless I could afford to have a classic sitting in the garage as eye candy.....

PS: Hawk20, where did the quote come from? I'd like to read that, preferably without having to pay shedloads for the study in full.....

 

[Rory]

Porsche makes an astounding £14,173 average profit on every car it sells, according to a study carried out by B&D Forecast and printed in German newspaper Welt am Sonntag.

I remember reading an article that said Porsche were really struggling a few years ago, particularly as sales in the US (their main market) were falling dramatically.

Then they brought out Cayenne. Many Porsche purists (and many other people!) hate the car, but it sold in good numbers in the US and was *hugely* profitable. The article suggested that the Cayenne probably saved Porsche, if not from bankruptcy, then at least from being taken over.

It's interesting to note that SUV's have always been very profitable for car manufacturers, which is why they're all so very keen to introduce them. They really don't cost much more than an ordinary car to make, especially in the US where they are generally only 2WD (as is starting to happen here, with Nissan's Qashqai etc). At the height of its popularity, Ford in the US was making $10K profit on every Explorer they sold.

 

[nick mercedes]

Porsche makes an astounding £14,173 average profit on every car it sells

I'm not surprised, isn't their main model just based on what they turned out in the 60s?

And the others are just parts bins specials knocked out from VAG parts?

 

[Bobby Dazzler]

I read somewhere on the winterweb that Boxster has the saviour and Cayenne that made 'em rich!!

Whatever it was it's a good job it did. Benchmarking against the 911 is what keeps the competition on their toes - Nissan GTR is a case in point.

 

[Dryce]

That is just an amazing statement. The accounts of the major companies are all audited by independent auditors, crawled over by finance experts, economists and accountants in all the investment and broking houses, and are watched by shareholders too (which include all the big pension funds).

The nature of balance sheets is such that there is a lot of scope for moving numbers around and assumptions about where the value is - particularly in a large business.

How much does an item cost? Well there's the materials and labour at the factory. Then there's distribution and advertising. Dealer subsidies.
Then there's amortisation of capital investment and R&D. Cost of HQ and cost of finance.

And so on. The figures are very hard to interpret.

Typical example is that company X is having a bad year. The CEO is replaced. It's holding a lot of unsold stock. So it takes all the pain at once and writes down the value of the stock and lumps in other losses. Things look terrible. So they also write off a whole load of R&D held on the balance sheet as well.

Next year it appears to make a profit. Turns out that they managed to discount the unsold stock at above the write down value. Their operation looks good too because they've reduced the amount of R&D that they write down in subsequent years so it looks like their costs have dropped. The balance sheet starts on an upward curve again.

All above board. Keeps the City happy for a while. The new CEO has apparently turned things around. Shareholders get a dividend. The losses from the bad year can be used to offset some tax liabilities so there's some extra cash floating around in the business too.

So are things as rosy as they appear?

 

[GrahamC230K]

I was looking from comment from Steve_BCS.

 

[Dryce]

I'm not surprised, isn't their main model just based on what they turned out in the 60s?

And the others are just parts bins specials knocked out from VAG parts?

This would probably have been a fair statement during the 80s.

But the modern 911 is only themed on the original in terms of shape and engine layout. And they don't make 914s or 924s any more so the VAG link seems to have faded.