As autoworkers, especially if you went through the strikes of 2019 and 2023, the odds are good you have been blamed for the high price of vehicles. Comments like ‘you guys are half the cost of a new car, why are you on strike?’ and “you make too much, you are killing the industry” were common during those strikes. So how much is labor cost per vehicle? CarScoops has posted Germany’s Labor Costs Make America Look Like A Bargain Factory. The report is based on a consultant firm Oliver Hyman report entitled Why Automakers Need To Focus On Labor Cost Per Vehicle which contains this gem…
The third archetype, mainstream model manufacturers, has an average labor cost of $880 per vehicle and includes traditional high-volume automakers from various countries. Japanese manufacturers enjoy lower labor costs per vehicle, with an average of $769, compared with manufacturers in the United States, where the average is $1,341 — a labor cost per vehicle that reflects recent historic union gains.
GM is a mainstream model manufacturer with a labor cost per vehicle of $1,341. What percentage is this of the average vehicle. Let’s look at the average transaction price for a GM vehicle…
The average transaction price (ATP) for GM vehicles in the fourth quarter of 2024 was $51,292. This figure represents the average amount customers paid for new GM vehicles during that period. The ATP for GM vehicles has shown a trend of increasing in recent months, with the fourth quarter ATP being higher than the third quarter.
Are you the reason vehicles cost so much? Let’s run the numbers.
Average Labor Cost Per Vehicle: $1,341 / $51,292 Average Transaction Price = 2.6%
If we all worked for free the price of the vehicle would be $51,292 – $1,341 = $49,951.
Just for fun let’s see what the difference would be in the monthly payment using a 48 month loan with no interest just principal.
$51,292 / 48 months = $1,068 per month
If we worked for free the monthly payment would be..
$49,951/ 48 months = $1,040 per month
So the next time someone says you are making so much money they can’t afford a car. Show them the numbers and watch the look on their face!
(graphic by Mohamed Hassan @ Pixabay)
