By on November 23, 2011

What matters in the world of cars? It’s a question we’re always asking here at TTAC, and depending on your perspective, the answer could be almost anything. But for all of their cultural significance, cars are ultimately a business, and if you had to boil down the value of a vehicle to one single attribute, it would have to be profitability. But that’s a tough measure to make, considering automakers don’t typically break out profits by vehicle, let alone by model line. Which is why I was so excited to see a list of the 12 most profitable vehicles since 1990 compiled by Max Warburton of Bernstein Research, and published in Automotive News Europe [sub]. So, what’s the most profitable vehicle in modern automotive history? The answer can be found just after the jump…

1. Ford F series
2. GM full-sized pickups
3. Dodge Ram
4. Mercedes S class
5. BMW 5 series
6. BMW 3 series
7. Mercedes E class
8. Lexus RX SUV
9. Jeep Grand Cherokee
10. Honda Accord
11. Porsche 911
12. Toyota Camry

Perhaps not the most surprising list imaginable, although the obscene profitability of pickups may just take your breath away. According to Warburton’s research, the “big three” American pickup models created $108 billion in pre-tax earnings since 1990, about the same amount as the rest of this list combined. As Warburton explains

The sweet spot for the industry is high prices and decent volumes (BMW 5 series, Mercedes E Class) and medium-sized price points and massive volumes (Ford F-series pickups, SUVs)

But, according to the respected analyst, that may be changing. Not only are pickup profits going to face pressure from emissions regulations, but there’s another dynamic worth noting:

Average volumes per product and body style are falling because the market is fractured into smaller and smaller sub-segments.

In short, per-model profitability may already have peaked for the industry. Which is why per-platform profitability is taking center stage. Hopefully we’ll soon see some new analysis in this regard…

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36 Comments on “The 12 Most Profitable Vehicles Since 1990...”


  • avatar
    jimbowski

    So, there is the answer to the question “Why do dealers stock so many trucks?” Excuse me while I online configure my new $58,000 Ram.

  • avatar
    stryker1

    Either that’s a Mannequin, or that guy has the greasiest arms I’ve ever seen.

  • avatar
    cmoibenlepro

    Does it take into account the development costs?

  • avatar
    Pch101

    Trucks should have relatively low R&D costs, which would enhance their profitability.

    Cars such as the 3-series and E-class have the benefit of being some of the only commercially successful “world cars” that can sell in reasonable volumes. Combine that with strong margins, and those should be winners.

    In short, per-model profitability may already have peaked for the industry.

    For the most part, it already is. The days of GM or Ford selling 500,000 units per year of any one passenger car in the US are long gone. They are going to have to figure out how to make platform sharing as lucrative as possible, while avoiding the sins of badge engineering.

    • 0 avatar
      Robert.Walter

      I’m not convinced that truck r&d costs are less than that of cars. On a per-unit amortized basis maybe yes because of the big volumes, but because of the complexity and number of variants the overall program costs could well be higher. Component costs will be about the same, or greater if the vehicle is of the RWD BOF type.

      Regarding per model profit, this is one of the reasons Ford has decided, for the US market – at least for the time being, or until the might be forced to do so – not to replace the u/pn150/1-based Ranger with the new T-4 derived descendent.

      • 0 avatar
        Wheeljack

        I agree. People forget that a RWD truck has a separate transmission and rear axle, both large castings that require machining and cost money. A FWD car has just one major drivetrain casting in comparison. Now add the complexity of a 4WD model with a separate transfer case and a front axle, and the costs just went up.

      • 0 avatar
        krhodes1

        The cost goes up – but so does the PRICE. And given what they charge for 4wd, you can bet that it is more profitable than the 2wd version. Big rugged truck bits are not particularly expensive. What are expensive are tiny parts for tiny cars. It’s easy and cheap to engineer a great big rugged whatever when you don’t really care about the size of it or how much it wieghs. It is damned expensive to engineer small and light. This is why I find it so amusing when people complain that small cars like the Fiat 500 and Mini cost too much.

        I would love to know what is the most profitable vehicle on a UNIT basis. I would assume one of the special edition Porsches or Lambos.

      • 0 avatar
        Xeranar

        They use ladder frames and incredibly large and relatively inefficient drive trains. Their R&D costs are minimal compared to making a successful mid-sized car. The demands of a truck buyer are low in terms of R&D cost, a Model T truck could haul a reasonable load and trailer a decent amount for the average contractor.

        As Khrodes already pointed out small and light costs serious R&D money, when the lightest 1/4th ton pickup is almost 2 tons and the larger models are creeping up on 3 fully-loaded it isn’t hard to build something that strong, just increase the size. You could argue material and production cost go up but the base price for a truck is substantial compared to a mid-sized car or even an SUV.

    • 0 avatar
      damikco

      Truck buyers are more pickier than car buyers.

    • 0 avatar
      Scoutdude

      Truck R&D and more importantly tooling costs are more than that for cars. 1/2 dozen or more frames, usually more engine options, 2 and 4wd, more axles, brakes and spring rates to support the “1/2 ton” to as much as “2 ton” capacities, multiple length beds and usually 3 different cabs. However that is more than offset by the high volumes, the fact that the top of the line models can cost more than many “high end” cars, and the fact that until recently they had a longer shelf life to amortize all those costs over literally millions of vehicles in the case of Ford and GM.

      • 0 avatar
        golden2husky

        Trucks, on one hand have notably more combinations than cars. Yet many of the items carry over from year to year and if you look at a complex mid size sedan, it seems that assembly effort for a truck looks a lot easier. I think overall that it is less costly to manufacture trucks. What I find surprising is the margins made on trucks and SUVs. The main reason that the Explorer made so much money for Ford is that development costs were squat, at least compared to designing any new vehicle from scratch. What did the Contour program cost Ford? 6 Billion if I recall correctly. Explorers? I’ll bet the first gen Explorer was well under 1B…

  • avatar

    In Jerry Seinfeld’s bizarro world where everything is exactly the opposite the Saab 9-5 would be the most profitable car ever ;-) Must be the reason why the real Seinfeld drives 911′s.

  • avatar
    grzydj

    The during the height of the SUV boom in the 1990s, the Michigan Assembly Plant that built the Ford Expedition used to be the most profitable factory in the world. (Say “in the world” with your best Jeremy Clarkson voice)

    It has now been converted to assemble the new Focus and the electric Focus.

    That gives you an idea of just how profitable these vehicles can be, or better yet, used to be.

    • 0 avatar
      Robert.Walter

      When one would walk thru MTP one could see this by the gloss on the floor, all the good lighting and clean paint on the walls; even the Wixom Lincoln plant, while close, didnt seem to match-up.

  • avatar
    Bob

    Top 3 and the Jeep are Union made in the USA. I thought the UAW made cars unprofitable?

  • avatar
    tankinbeans

    I’m kind of interested in the placement of the Accord and Camry. Usually they’re placement in sales lists is opposite. Not to throw food at the “look at the fleet numbers” people, what else could this mean? Honda has figured out how to make their cars cheaper, with good quality and sell at higher prices? Does the fact that Toyota models run from subcompact to huge truck somehow hurt their profitability since for the longest time Americans wouldn’t buy full-sized trucks from anybody, but the Big 3?

    I’m honestly curious.

    • 0 avatar
      thirty-three

      I would like to see a comparison with the number of units sold during the same time period. That would show which cars have higher profit margins. I’m sure the Accord outsells the 911 by a huge margin, but the profit per unit is lower.

  • avatar
    bomberpete

    The fact that the Accord is a few notches higher than the Camry on this list isn’t really a big deal in the grand scheme of things. What’s more impressive is that these are the only two middle-class sedans on a profitability list that’s by populated by two kinds of vehicles: long-paid-for truck architectures, and luxo-barges with lots of profit built into their pricing.

  • avatar
    Educator(of teachers)Dan

    OK so lets see the “least profitable cars since 1990″ so we can figure out which ratholes those profits got poured down.

  • avatar
    cRacK hEaD aLLeY

    Every time I go under my Avalanche and its GMT900 platform I get reminded of the killing GM must make on these things.

    I think most of the people that designed the foundation of that chassis were retired by 1972 or so.

    Regardless, it is solid, bullet-proof and trouble-free (unlike my e-46), hence, I don’t mind.

    • 0 avatar
      bomberpete

      @Crackhead Alley: That’s it exactly.

      WHen you really think about it, GM has been reliant on out-of-date platforms for profits for nearly 30 years. Without the late Seventies downsized B- and G-cars, the Eighties and Nineties A- cars, but mostly the big trucks, I think GM would’ve been toast not long after the 1992 shakeup.

      But what’s most amazing to me is how GM completely screwed the pooch with mid-sized cars. Starting in 1964 and for the next 20 years, they ran that segment. The Malibu/Cutlass/Century/Lemans and the Monte Carlo/Grand Prix upscale models were the reason Wall Street loved GM so much. They also gave their owners reasonably good service overall — at least by the standards of that era.

      We all know that the product disasters of the Eighties changed all that, permanently. A whole generation — millions of consumers — might get a GM truck but would never consider a GM passenger car. They or someone they know got burned by an X- or J-car, for example. That created a huge paradigm shift. And if the repair/reliability data on most recent GM models like the Cruze is any indication, I’m not certain GM can ever recover from it.

      • 0 avatar
        carbiz

        Although I would never dispute the utter garbage Detroit built in the ’80s (having had the unfortunate experience with an ’82 Dodge Rampage, then an ’87 Shadow ES), it’s important to add that Detroit was flailing around with buckloads of cash and throwing it at technology – any technology, that would resolve the seemingly contradictory purposes of 6 passenger capability and 30 mpg. Fun to drive was not even on the agenda, nor were ‘good looks.’ Chrysler’s Lean Burn, GM’s diesels or 8-6-4 fiascos are shining examples. The uber-ugly X-cars, the list is endless, as we all know.
        Meanwhile, the Japanese Big 5 just kept building tiny rollerskates with lawnmower engines that got 35 mpg with ease which caught on with the college kids and the hipsters. The rest, as we all know, is history.

  • avatar
    jimmyy

    Detroit pickups are profitable because the government has trade laws that protect this market for Detroit. Foreign pickups are subject to a tarrif.

  • avatar

    Wait, but I thought the Detroit 3 were stupid and short sighted for producing all this big, ugly, gas chugging, shitty trucks and SUVs – this list has obviously been influenced by the UAW![/bullshit_rhetoric]


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