For back of the napkin calculations, You should use a US sell price of what the market will bear. For one, I would start at the US price landed here including any import duties.
Okay, I'm going to chime in here. I have experience both as a manufacturer (Pterodactyl Ltd and others) and as a designer licensing a product (Cuyunair and others).
For starters, note that the market isn't bearing the US price landed plus duties, as shown by the rarity of Exocets in the US. If retail customers were importing 60 a year at that price, one could reasonably hope to sell 60 a year locally built at that price. The current purchase price does not define "What the market will bear" if they're not selling. Licensing the design makes good business sense because it's a way to get the price <down> to what the market will bear.
Now subtract from that sell price, the cost of shipping(750?), crating costs(250?), build materials (2750?)the 250 USD royalty fee, etc to come to a profit per unit sold (843?). And that is figuring you are working out of your own garage or have no fixed overhead costs.
Well, there's the 40 thousand dollar signing fee. I'd figure the cost of building your own tooling is about equal to the cost of crating and shipping the UK tooling, so it's pretty much a wash if the tooling is done here or there. If you sell 40 Exocets, that's another grand per car. And if you have no overhead costs, then maybe you should rent out your facilities to somebody else and profit from the rent--seriously, why bother manufacturing if you have something as valuable as a zero overhead manufacturing operation? Let somebody else use your shop, and have them mail you a check every month.
I figure that the galss work is outsourced as is the frame build. This reduces the break even period considerably.
Well heck, if you're not counting your own labor in your costs, how does outsourcing lower the break even point? Why not do it for free yourself?
One ends up operating much like Jack's Kinetic Vehicles where there is a minimum of overhead and much of the actual labor is outsourced.
Grrr. Seen my lease lately? How about my insurance premium? Darn near <all> of my "actual labor" is outsourced, because A) I can't weld well enough to meet my standards for quality products, B) I don't have enough work to make payments on a CNC laser cutter, and B) if I spent my time fiberglassing, I wouldn't have time to take on the projects that pay my "minimum of overhead."
I think the entry costs and the royalty are unrealistic. I've never charged more than a 2-1/2% royalty on anything I've ever designed. I've paid more royalty than that on specialized low quantity items (e.g. Haynes Roadster noses) where the tooling costs exceed the expected royalty costs and the shipping (again, HR noses) makes stocking the original item impractical. But once you have significant sales, the problem with high royalties is, it encourages others to knock you out of your own market.
If a manufacturer is making 15% return on investment, it's doing darn good and everybody in management has a secure job. If it gets under 10% then management has some explaining to do. If it gets up around 20%, then next year (or maybe even next month) you have other businesses doing the same thing you're doing, and undercutting you by 5%.
So let's imagine you're a US manufacturer that has taken the offer to build Exocets for $40,000 down and $250 a unit, and you're selling the kits for $4843. You're paying $250 for your royalty and $400 each for the first 100 units for the privilege of making them. And you're personally making a poverty level profit of $16,000 a year, that's $160 a kit for 100 kits a year. Don't you think somebody else will be tempted to do the very same thing you're doing for $3999?
I wonder what the real market is for a minimalistic kit? I guess we'll never know.
Not if a minimalistic kit manufacturer is going to send 10% of gross to another manufacturer, and pay half of that up front, and have to sell 160 minimalist kits before the design costs drop to 5% of gross.
All in all, the Exocet is an interesting concept and possibly one with market potential here in the US, were it US manufactured. But wow, forty grand as a buy-in, plus another 5% of retail on top of that per unit as a royalty, that doesn't leave a lot for the local manufacturer to take to the grocery store.
But that doesn't mean we'll never know. Plenty of people on this forum are perfectly capable of developing a drop-on-a-Miata frame and body combo for less than $40,000. I'd do it myself, but I don't think that "real market" is anywhere near 100 units a year in North America.
> If you try to make this deal and have the capacity for only 12 vehicles per year, MEV would be stupid to agree to the deal in the first place.
Are they selling 12 Exocets a year in North America now? If not, then they'd be getting $40,000 right off the bat, plus $250 per car for more cars than they're currently selling here. Doesn't sound all that stupid.