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.
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