Luca di Montezemolo

Toyota, that same kind of range, 18% to 21%.

Toyota is exceptionally well run.

Isn't that amazing that Toyota generates on the order of three times as much gross margin per car that rolls off the line compared to Ford?

Yeah.

That is incredible.

Ferrari is 50% gross margins.

I get the sense the range is like 30-ish percent, maybe 35%.

And then the supercars are in the 80% to 90% gross margin range.

So it is worth pointing out here, this average 50% gross margin, you might say, oh, it's a luxury brand, which is the assertion I'm making.

They do have to make a bunch of complex, expensive, giant hunks of metal and safety and engineer the absolute crap out of them and truly innovate.

So when you look at companies that don't have to do that, LVMH is 66% and Hermes is 71%.

So, I mean, there exists a category when you don't have to do all of that hard engineering work where, you know, it's a good business just selling handbags.

Yep.

But still, Ferrari is able to sell their cars for twice what it costs them to make, whereas if BMW spent $100 to make a car, they only get to sell it for $115.

Right.

So perhaps more interesting, though, than all of this, than the gross profit percent is the gross profit absolute dollars.

The profit per car average exceeded $170,000.

That is more than the entire retail price of your average luxury sedan.

And even Porsche would need to sell six cars to equal the profit dollars that come from a single average Ferrari.

Wow.