dyezak

Well, fitments for exotics are unique. You aren't going to get a set of wheels that fits a Lambo or Ferrari with a common bolt hole diameter, hub diameter, and offset. Take the Ferrari Enzo, it uses spindle mount wheels...only F1 and LeMans cars use those in any apreciable quantity. Porsche wheels however are a little more common, I believe they share bolt hole and hub diameter sizes with Audi and VW.

So if you are designing wheels for a Ferrari or a Lambo then you know right off the bat that your market is a very very small place. We will use Ferrari by itself to keep things simple, and compare it to the Honda Civic:

In 2008 only 6500 Ferrari's (ALL ferrari's, of which there are multiple different wheel fitments) were sold to the general public.

In 2008 roughly 400,000 Civic's were sold.

I found a statistic (true or not, but seems fair) that only 6% of the population modify their cars. So if we use a blanket 10% in our calculations we should be safe.

That gives us (the hypotheical wheel manufacturer) a possible 650 Ferrari's that would buy custom wheels, and 40,000 Civic's that will buy custom wheels. All the Civic's have the same fitting requirements (they all have the same bolt hole diameters, hub diameters and offset requirements). The 650 Ferrari's are split among 2 different fitments. So if we choose one car that takes us down to 375 cars.

Now we have to think, how much of the market can we capture. We know that not every single Ferrari owner is going to buy *our* wheels, we have competitors and some of the Ferrari owners are going to go with them. Let's say we are the best...so we get 50% of the market. That means we could capture 20,000 Civic's or 188 Ferrari's.

Now, do the different wheels actually cost more to develop? Nope. Same designers working for us putting in roughly the same ammount of time. But we get to spread the cost of re-couping that investment among 20,000 people for our new Civic wheel, and we have to re-coup that same investment from only 188 people who drive the Ferrari.

Now that they are developed they have to be made. If we are talking cast or forged we have to make molds. Again, that mold cost can be re-couped among 20,000 Civic owners but only 188 Ferrari owners. If you want to talk CNC then the CNC machine cost would be substituted for the mold cost.

Material cost will be the same.

So lets say we spent $250,000 in labor (engineer's aren't cheap) developing our new high tech wheel. And another $100,000 in manufacturering setup (molds or CNC machine). We have to re-coup $350,000.

But wait, the Civic uses 4 of the same wheels in most cases, where the Ferrari is going to need different front and rear wheels. So double the Ferrari development and manufacturering costs to $700,000.

Assuming it actually costs us $200/rim in materials (we are using some really high end stuff here right?), that's our base cost.

So, Civic = $350,000/20,000 = $17.5 per purchaser needs to be re-couped
That means we will need to re-coup $4.38 of our development cost per wheel. That means our civic wheel will cost $204.38 to produce.

So Ferrari = 350,000*2/188 = $3723.40 per purchaser that needs to be recouped or $930.85 per wheel. That puts our Ferrari wheels at $1130.85 right off the bat to produce.

Now go add in distribution, shipping, advertisement, warantee buffer, that have to be added up and distributed in the same mannor. You can see that even if we spend $500,000 for these services, the Civic's cost will only go up by about $6.25 where the Ferrari will go up $644.89.

Bam, we have a $1800 Ferrari wheel and a $210 Civic wheel. Now we are a business so we need profit to keep moving forward. So factor in 25% profit and that takes us up to $2250 for the Ferrari and $262 for the Civic.

This is assuming that we are the best wheel company that has ever walked the face of the earth and we are able to capture 50% of the market, if you adjust these figures to a more resonable market capture rate (12%) then the numbers fall in line.