Cheaper for mazda?
#26
Originally posted by Buger
Hi Tronic,
Your opinion does not seem thought out completely. Are you stating that you believe that companies lose profit when they lower production costs?
There are other very simple economic reasons why the last gen RX-7 became too expensive. There doesn't seem to be a reason to have to resort to conspiracy theories to explain things here?
Brian
Hi Tronic,
Your opinion does not seem thought out completely. Are you stating that you believe that companies lose profit when they lower production costs?
There are other very simple economic reasons why the last gen RX-7 became too expensive. There doesn't seem to be a reason to have to resort to conspiracy theories to explain things here?
Brian
#27
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I don't know how auto manufacturers set up their facilities, but I would think the startup cost for a rotary engine plant is more expensive in proportion because they're so uncommon. The actual engine production, once the plant is set up, might be cheaper, but I would think the plant itself is more expensive.
If you want to manufacture a piston engine, there are probably hundreds, or maybe thousands, of manufacturing facilities that do the same around the world. You can copy their techniques, easily outsource portions of the production process, and get a lot from other vendors. Not only that, but you can put suppliers in a bidding war with each other to reduce costs.
To make a rotary engine facility, the only resources Mazda has is knowledge from previous Mazda manufacturing of rotary engines. Any specialized equipment for the job has to be custom made. They can purchase the metal and plastics from the same places everyone else does, but they need unique configurations.
I could be totally wrong, of course. This is just a guess.
If you want to manufacture a piston engine, there are probably hundreds, or maybe thousands, of manufacturing facilities that do the same around the world. You can copy their techniques, easily outsource portions of the production process, and get a lot from other vendors. Not only that, but you can put suppliers in a bidding war with each other to reduce costs.
To make a rotary engine facility, the only resources Mazda has is knowledge from previous Mazda manufacturing of rotary engines. Any specialized equipment for the job has to be custom made. They can purchase the metal and plastics from the same places everyone else does, but they need unique configurations.
I could be totally wrong, of course. This is just a guess.
#28
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Originally posted by Buger
Hi Canzoomer,
I'm not sure if you read my earlier posts on this thread but the main reason why the 3rd gen RX-7 became too expensive is because of the varying Yen-Dollar exchange rates.
The 1985 exchange rate was 238 yen/dollar while the 1995 exchange rate dropped to about 94 yen/dollar. This had a huge effect on the US prices of all of the Japanese exports and we saw the end of the Z, the Supra and the RX-7. The volatility of the exchange rates is a major reason why many of the Japanese automakers pushed harder to build more plants in other countries.
Brian
Hi Canzoomer,
I'm not sure if you read my earlier posts on this thread but the main reason why the 3rd gen RX-7 became too expensive is because of the varying Yen-Dollar exchange rates.
The 1985 exchange rate was 238 yen/dollar while the 1995 exchange rate dropped to about 94 yen/dollar. This had a huge effect on the US prices of all of the Japanese exports and we saw the end of the Z, the Supra and the RX-7. The volatility of the exchange rates is a major reason why many of the Japanese automakers pushed harder to build more plants in other countries.
Brian
In November 1995 the dollar/yen rate was 1-102
In November 2002 it sat at 1-102
Today it is at 1-109
More interesting is that in January it was at 1-120, but we have seen no price changes this year from the Japanese auto makers.
If that were a truly important factor one would see that the price of the RX-8 would have changed, but it has not.
It is pretty well a given that when rates change out of their favour they will howl and complain.
But when it changes to their favour do they complain? Of course not!
These are businessmen, and they play it up and down, just as people do in the stock markets.
As for the cost factor due to exchange rates, about the only variable that is affected is the cost of labour involved.
If we take that into account the change in cost and price should not be that significant. Remember, when the rates changed as drastically as they did the Japanese automakers had an inventory, which rose in value. This offset the cost increases for at least one year.
#29
We can argue as much as we want, but we will never reach a definative answer unless Mazda releases some information about costs, which IMO they never will. Who knows how much each RX-8 costs to build for mazda. Could be half the amount at invoice, 1/4, 1/3, and so on. Your guess would be as good as mine.
#30
Originally posted by Tronics
I believe the cost of production could be lowered if mazda wanted to, but why would they? They'll be the ones losing profit.
I believe the cost of production could be lowered if mazda wanted to, but why would they? They'll be the ones losing profit.
Originally posted by Tronics
Yes, I'm stating that companies lose profit if they lower prices when they do not have to. Might not be an actual lose, but they will surely not be making the most money they can.
Yes, I'm stating that companies lose profit if they lower prices when they do not have to. Might not be an actual lose, but they will surely not be making the most money they can.
Whatever the case, this is all economics and perhaps some economics people would want to discuss this further.
#31
Registered
Looks like many people disagreed that the Renesis is expensive to produce, but I looked up my reference for that: Bob Hall, a journalist who spent ~14 years as a product planner for Mazda (1982-1996) and is credited as being the father of the Miata, participates regularly at www.miataforum.com under the username bwob. In this thread discussing the possibilities for the next generation Miata, he wrote:
Given that Bob spent 14 years in Mazda's employ and still has many contacts within the company, I tend to trust his statements regarding Mazda!
Regards,
Gordon
The use of a rotary in a Miata is mitigated by the fact the rotary (in old 13b or Renesis form) is a very expensive engine to manufacture. The mechanized aspect of its construction (primarily milling and machining processes) is not such a big deal, but the fact that final assembly is almost done entirely by hand is a real problem. At 1970s wage levels and 360 Yen to a US Dollar that wasn't a problem, but today's wages in Japan and a much stronger Yen make use of the rotary in a car cheaper than a base RX-8 a dodgy proposition.
Regards,
Gordon
#32
Originally posted by canzoomer
Perhaps, but it does not seem to have had much effect in the last 10 years.
In November 1995 the dollar/yen rate was 1-102
In November 2002 it sat at 1-102
Today it is at 1-109
More interesting is that in January it was at 1-120, but we have seen no price changes this year from the Japanese automakers.
If that were a truly important factor one would see that the price of the RX-8 would have changed, but it has not.
Perhaps, but it does not seem to have had much effect in the last 10 years.
In November 1995 the dollar/yen rate was 1-102
In November 2002 it sat at 1-102
Today it is at 1-109
More interesting is that in January it was at 1-120, but we have seen no price changes this year from the Japanese automakers.
If that were a truly important factor one would see that the price of the RX-8 would have changed, but it has not.
Originally posted by canzoomer
It is pretty well a given that when rates change out of their favour they will howl and complain.
But when it changes to their favour do they complain? Of course not!
These are businessmen, and they play it up and down, just as people do in the stock markets.
It is pretty well a given that when rates change out of their favour they will howl and complain.
But when it changes to their favour do they complain? Of course not!
These are businessmen, and they play it up and down, just as people do in the stock markets.
I'm sure you must be aware of this but I'm not sure why you don't think that exchange rates were a "truly important factor" in the price rise of the last RX-7.
Originally posted by canzoomer
As for the cost factor due to exchange rates, about the only variable that is affected is the cost of labour involved.
If we take that into account the change in cost and price should not be that significant. Remember, when the rates changed as drastically as they did the Japanese automakers had an inventory, which rose in value. This offset the cost increases for at least one year.
As for the cost factor due to exchange rates, about the only variable that is affected is the cost of labour involved.
If we take that into account the change in cost and price should not be that significant. Remember, when the rates changed as drastically as they did the Japanese automakers had an inventory, which rose in value. This offset the cost increases for at least one year.
Whatever the case, I'm not really here to discuss supply/demand and economics. I originally posted some info on the reported cost of the renesis and got sidetracked because I couldn't understand how anyone could think that all of the Japanese manufacturers would arbitrarily raise the prices of their cars in the mid-90s so that they could lose money.
#33
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Once the plant and equipment are in place the marginal cost of each engine is probably not that great. Because of fewer moving parts, etc., that should lower the price. But the fixed costs of the rotary are probably high because it's unique and takes unique equipment (plust they want to cover the fixed costs of the R&D they put into it). Mazda, with its monopoly power over the rotary is able to recoup those fixed costs of both machinery and R&D.
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