Quote:
Originally Posted by Happy Monkey
That's a weird way to compare them. Manufacturing costs should be amortized over the life of the factory. They don't count just for the first generation of vehicles to come out of the factory. Using that standard, you could just as easily say that the first vehicle out of the plant cost billions and the second was just the cost of materials and labor.
|
Not exactly, the factory can be amortized over the life of the factory, but the tooling for each specific model is amortized for that model. I think the tooling costs far exceed the factory cost.
When I say tooling, I'm including all the costs to design, refine and test the model prior to production as well as the specific tooling to manufacture it. The factory is just a box to keep the weather off the expensive shit.