Green Car Congress  
Go to GCC Discussions forum About GCC Contact  RSS Subscribe Twitter headlines

« Glycos Biotechnologies and Eureka Genomics Sequence the Genome of a Proprietary Bacterium for Emerging Biorefinery Industry | Main | Life Cycle Analysis of Camelina-based Renewable Jet and Diesel Fuels Shows 84-89% GHG Savings Compared to Petroleum Fuels »

Print this post

Report: Honda, Toyota Earning Profits on Hybrids

28 April 2009

The Nikkei reports that Toyota and Honda are both making estimated profits of about ¥300,000 (about US$3,100) each on every hybrid they sell, similar to what they make on small, gasoline-engined vehicles.

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 report said 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. Toyota’s gross profit margin on the sales of the next-generation 2010 Prius are projected to be in the single digits in the first year.

April 28, 2009 in Brief | Permalink | Comments (12) | TrackBack (1)

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c4fbe53ef0115705a6aa7970b

Listed below are links to weblogs that reference Report: Honda, Toyota Earning Profits on Hybrids:

» Hyprofit from dustbury.com
Hondas new Insight is priced substantially below Toyotas Prius, a gambit which at first made me think they were playing the old loss-leader game, trying to establish market share, then collect the payoff somewhere down the road. Well, it ... [Read More]

Comments

Considering all the components in even a simpler IMA Honda hybrid, I am amazed that they can make $3000 profit on each car. The 2010 Insight sells for under $20,000 and they can still make a good profit. This is good business.

LOL!!
I remember when the Corporate aholes in Detroit where saying the Prius was a money losing PR stunt.

Gross isnt the same as real. They spent a hell of alot of money. Its like a nuke plant can gross one hell of alot but in the end how much does it make?

Point taken, but the long term view of many Japanese allows for a payback over time. Toyota licensed Prius technology to both Nissan and Ford. They can find ways of making the money back in short order. Honda invested less in the IMA I would say, so their payback on development might not be as long.

If Honda & Toyota can make $3000 profit on every $20-22K, 50 mpg Hybrid, GM's $40K + Volt may not sell that well.

The Prius-20 PHEV will probably start at about $25K in 2011. If it does, it will take the Volt for a spin.

GM may have to subcontract the Volt to BYD China to compete.

if GM can sell barely 100 000 Volts/year 5 years from now on which they will loose 10 000$ each, that will be a big success, in the same time Toyota and honda will sell 1Million Prius and Honda Insight making 3000$ per car, wow that's big money

If this can be taken at face value and they are actually making $3000 per hybrid that is very bad news for GM, the Volt and Ford.

Never mind Toyota and Honda paying off the investment; that can come in time and/or can be written off as advertising, good will and eliminating competition from the US, German and Korean auto makers.

If the quoted $40K price for the Volt holds true it will go nowhere.

The (really) good news is this implies only moderate improvements in batteries are required for hybrids to break out of the "less than 5% of new sales" doldrums.

If we want 50% or more of the cars on the road to be hybrids soon, we need sales way over 50% sooner.

"If this can be taken at face value" toppatom, come on!

You posted a quote from a posting in the message board priuschat dot com from 2004 as an authoritative source that Prius loses money and now you question the companies public disclosures to the stock exchange. If they lie to the market they would be sued by their investors and possibly be subject to criminal prosecution.

Research and Development is a period cost that is expensed when incurred. It has nothing to do with advertising, goodwill or eliminating competition. I am not even sure what eliminating the competition entails.

GM needs to develop new products, if it sells the same stuff that it has now it will be bankrupt... all of the car companies will go bankrupt. See Tata Nano.

They must create new products. I applaud GM for moving forward with the Volt. They can get the pricing correct later (how about sub $10k).

If GM can't compete with Honda and Toyota, how will they do against BYD's PHEV at $12K and $15K.

If home built PHEVs cost $40+, would GM be better off becoming a distributor of imported Hybrids, PHEVs and BEVs?

It remains to be seen how much Ford will make on the Fusion hybrid or how much they make on the Escape hybrid. I would bet that they have not made a lot on the Escape hybrid over the last 3 years. They do not make enough of them and make them on the same line as other Escapes. This lack of commitment shows me that it is not a real money maker. Over the years, I have seen periods where there were few or none on the lots, which shows me lost revenue.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Green Car Congress © 2013 BioAge Group, LLC. All Rights Reserved. | Home | BioAge Group