For one, Ineos does not need the money, so low margins may be ok. But they are also not stupid, and in some aspects have kept development costs low. Frankly if 1.1B to get started is true, that is VERY cheap. Sounds like something Elon Musk would pull off. My order was over 39K, that puts sales over 3.15B. With a 14% luxury brand margin, they have about 315M to deal with the early launch warranty fixes so far. So they are surely losing money the first year, but I am not sure it is terrible. If this was a 50K vehicle, that would be another story. The rest of the story is up to them. Provide service, stay true to the design and purpose, upgrade, improve and buyers will keep coming on board. Make sure the US off-road crowd wants to take them on major trails like the Rubicon as they age, and more fanatic's will join the club. Raptors were not supposed to sell, Rubicons were considered so stupid and unsellable by Jeep that EMPLOYEES paid for development costs and now its a cash cow, Broncos with a Sasquatch package were for a few elite, but thats all that gets ordered......
If Ineos don't need the margin, why has the price raised to around 90,000, 100,000 Euros when in the end of 2021 the price approached was around 54,000 to 57,000 Euros? While two Grenadier protoypes sat my workshop in 12/2021 the price jumped to over 64,000 Euros. And I was personally told by the Ineos Global Aftermarket Manager in 2020, that the desired price will be somewhat higher that a Toyota Hilux while it was planned to repair cars even at your home (Something I do not get together in my head, that price and that level of service).
Why do you think margin is not important for Ineos? Do you think it is just fun and JR pumps money into Ineos Automotive every month with a big smile? Ever thought about why it was pushed into the market so early with all these flaws and the necessity to repair the car at the dealer sites (what generated even more costs)? Because Ineos Automotive had to start writing bills and not only paying them. In addition, check how Ineos chemical business is struggling in Europe since one year....
Where do you know from that the development costs where kept low? Is a low develpment cost something which justifies a luxuary price tag (when margin is not an issue for Ineos?) and thereby kicking out potential customers right from the start (like communites which need to call for bids and and commercial users which are very price sensitive if the car is not used for presentation but for real work). Most parts of the Grenadier are new. New parts require new tools. Tools are very expensive. For Ineos and every supplier. Take the headlights or the rear lights for example. There were standard light available from different suppliers all over the world. But Ineos decided to ask for a new development. That is abolutely ok and fine. It is even desireable, but it is not keeping the development costs low. The same applies for the frame, the body, the transfer box, the axles, the dashboard, the software and even small stuff, like the steering wheel etc.
And think about the many iterations until the design was ready....every iteration meant a step back, starting again...that is not for free...
Why has Ineos taken the burden (and costs) of providing the winch, the double battery system and all that, while the aftermarket is full of experts, doing exactly these upgrades since decades. Going this way means Ineos had to find the right suppliers, integrate it into the car, write handbooks, educate technicians, buy the parts, homologate the parts (with the car), keep the parts on stock, integrate that into the production, repair the parts, give warranty for these parts (and warranty always requires you to build up provisions on the financial side=decreases the margin). But the worst is, they have to take the customer beats when it doesn't work well and harm their reputation....for what? Why? It could have been easier and cheaper.
I call that the oppositie of keeping develeopment costs low.
"Ineos does not need the money" is absolutely a fairy tale. At Ineos all, absolutely all is about money, when it has become a business unit and not a private pleasure. Of course, it is a project of heart for JR, but he didn't get as rich as he is by throwing his money into projects which doesn't multiply it. Or should I say where the intention was to multiply it....it hasn't worked out always....just check the Ineos news portal and you will find some of these projects....
AWo
