The most profitable vehicles don’t sell by accident. According to Max Warburton of London-based Bernstein Research, the most profitable vehicles of modern times stand out for a variety of reasons. The greatest successes can help an automaker ride the wave in boom times and stay alive during bust times.
Profit allows for more growth
Warburton’s study focuses on the top 12 most profitable vehicles. Long-term profit generated over complete product life-cycles that spawn multiple generations are closely scrutinized. This includes carryover parts, systems and technological advances in engines and transmissions, which became more common within the past two decades. Hence, that was the time parameter for the Bernstein study.
What Warburton and company found is that the top 12 most profitable vehicles since 1990 have generated a massive $2.2 trillion in revenue. Of that, approximately $230 billion ended up as earnings before interest and taxes (EBIT), notes Automotive News. Such money contributes mightily toward research and development, allowing for risk-taking and growth.
Decoding the formula
The formula for cars that sell breaks down into three key components, according to Warburton: strong price point, high volume and long life-cycles. Put another way, that’s “margin, volume and continuity,” writes Automotive News.
It sounds simple on paper, but it is difficult to execute. The price-point issue knocked small cars out of the running entirely. Mid-sized sedans like the Toyota Camry and Honda Accord were able to make it in by the skin of their teeth on per-unit margin, but volume and continuity were out of sight.
Germany luxury sedans fared quite well, as the BMW 5 and 3 Series and the Mercedes S and E class had all three qualities in ample supply, thanks to global export numbers.
Americans and their pickups
As might be expected, full-sized pickups fared quite well in the U.S., led by the Ford F series, GM Silverado and Sierra brands, plus the Dodge Ram. Tremendous volume, double-digit margins and loads of carryover were the hallmarks of success. Over the past 20 years, Ford, GM and Dodge has pulled down $110 billion in pre-tax profits with these top-selling light trucks.
Most profitable vehicles, 1990-2011
Listed in U.S. $ billions in terms of revenue and earnings, here are the most profitable vehicles, according to Bernstein Research.
1. Ford F Series
2. GM 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
|Revenue (U.S. dollars)|
|Earnings (U.S. dollars)|
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