Originally Posted by
CAT7RDR
Once worked for a Mercedes dealer and found out informally that the markup from manufacturing cost to MSRP was 100%. I carry that thought with me when shopping for cycling attire. I imagine the retail markup is well over 100% for these up-market brands. I just do not like getting greased by any brand.
This isn't surprising at all. "Manufacturing cost" would probably be the marginal cost (the additional cost of building the car), which would not include R&D and design and other overhead costs, marketing, transportation, distribution, warranty service, etc -- and hence it is lower than the actual
total cost of building a car. A 100% markup from marginal cost to MSRP doesn't seem that high, and is probably pretty typical. The conclusion that MB's markup is
not unusually high is further supported by the fact that they are in a fairly competitive market (i.e., one with many close substitutes such as BMW), which constrains their pricing power.