The Truth About Cars » glenn mercer http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 26 Jul 2014 01:30:09 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » glenn mercer http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com How Much Does Homologation Really Cost? http://www.thetruthaboutcars.com/2013/12/how-much-does-homologation-really-cost/ http://www.thetruthaboutcars.com/2013/12/how-much-does-homologation-really-cost/#comments Thu, 12 Dec 2013 14:00:09 +0000 http://www.thetruthaboutcars.com/?p=676986 homologation

Being teased with a desirable but unavailable variant of a car sold on our shores is as inevitable as death and taxes. Every year, there is some new supercar station wagon, ultra-efficient diesel or hot hatch/rally special that seems just within our grasp. Inevitably we learn that it won’t be making its way to America for a variety of reasons. Ultimately, it boils down to one simple factor: it would cost too much to bring it over.

The cost-benefit analysis is a cold reality of the automotive world, which is in the business of making money from selling cars, rather than a charity that provides enthusiasts with playthings to lust after, but not buy. Hard to believe I know. The most enthusiastic among us are also the quickest to dismiss the lack of profit potential as a legitimate reason for not bringing over their pet vehicle of choice, and I think part of this stems from not being able to give them a one-size-fits-all answer. Every single case is different, with wildly varying requirements for volume, pricing, regulatory compliance and other factors. But the theme remains the same. OEMs would not be able to recoup the cost of certifying the car through sales of the (often niche, low volume and/or expensive) vehicle.

While reading an old report from noted automotive consultant Glenn Mercer, I found this slide (above, and on page 10 of his report on Chinese cars), which outlines what it took to bring the Elise over to America. The pricetag: a whopping $50 million and 16 months time, and this is with a special airbag waiver that exempted them from having to install (and likely develop) FMVSS-complaint airbags – something that would have significantly added to the overall cost.

Is it likely that Lotus made money on the Elise? Who knows. Perhaps they were able to simultaneously federalize components for the European Elise and the Evora and realize some cost savings? Then again, given the constantly precarious financial situation Lotus seems to be in, maybe not. But at the very least, it gives us a perspective on how expensive it is to bring a low volume enthusiast model over to America. Think Audi can recoup the costs of something like an RS6 Avant  or even an S4 Avant given what it would cost? On the other hand, Mercedes, which already has both the E-Class wagon and the AMG V8 compliant with FMVSS, meaning much of the work and cost is already done. Now you know why our pleas often fall on deaf ears – and how blessed we are when we end up getting something cool.

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