Honda & Toyota Making About $3,100 in Profits Per Hybrid

Hybrid Cars: Not Exactly a Loss Leaders
According to Japan's Nikkei, Toyota and Honda are making about ¥300,000 (US$3,100) on each hybrid they sell, a number similar to what they are making on gasoline-only cars. Of course, this doesn't take into account the investment in R&D; that had to be made, but since that can be spread over many vehicles, over a long period of time, and since it can help automakers future-proof (a lot of hybrid tech will probably be useful in plug-in hybrids and electric cars), it would probably cost more not to make those investments. Read on for more details.From Nikkei (via Green Car Congress):

If Honda sells 200,000 Insight hybrids worldwide in the first year of its release, the company would generate sales of more than 350 billion yen [US$3.6 billion]. Since it estimates a gross profit margin of more than 15% on the car—priced at under 2 million yen&mash;its gross profit on Insight sales is projected to hit around 60 billion yen [US$622 million] in the first year, or around 300,000 yen per unit.

The gross profit earned on the Insight is still low when factoring in the large R&D; costs involved in its development. However, the profit margin on its hybrid operations has risen to the level where Honda can count on it to generate the fourth-largest revenue stream behind its luxury, midsize and small car operations.

The Nikkei adds that "Toyota appears to have earned gross profits of around ¥100 billion yen (US$1 billion) on its sales of second-generation Prius hybrids last year." And with the pre-orders for the 2010 Prius hybrid rolling in despite the recession, things look ok for the immediate future.

Via Nikkei, Green Car Congress

Check out our 2010 Toyota Prius hybrid slideshow.

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Tags: Hybrid Cars | Japan | Transportation


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