Why are sleds so expensive?

[dnj1965]

I am seriously considering purchasing new next fall.

The following refers to the 2011 Apex, but applies to all $12k+ sleds...

After riding a 2011 Apex, I want one. Why do they cost so much?

For the cost of a 2011 Apex one could buy a new: 2010 Chevrolet Aveo, 2010 Chevrolet Cobalt, 2011 Ford Fiesta, 2010 Honda Fit, 2010 Hyundai Accent, 2010 Hyundai Elantra, 2010 Kia Forte, 2010 Kia Rio, 2010 Kia Soul, 2010 Mitsubishi Lancer, 2010 Nissan Cube, 2010 Nissan Versa, 2010 Pontiac G3, 2010 Scion xD, 2010 Smart ForTwo, 2010 Suzuki SX4, or a 2010 Toyota Yaris

Many of these vehicles have dollar/exchange rate issues, so it isn't the Yen vs. Dollar.

All come with safety features mandated by the U.S. Government, including air bags and seat belts, so it isn't the "the government regulations made us do it..."

The Yaris, as an example, comes standard (at < $14k) with:

Basic 36 months/36,000 miles warranty on all components other than normal wear and maintenance items and a 60 months/60,000 mile warranty on engine, transmission/transaxle, front-wheel drive, seatbelts and airbags.

It is powered by a 1500cc 4 cylinder gas engine with 16 valves and variable valve timing (admittedly with 40+ fewer horses than the Genesis on the Yammies), 4-speed automatic transmission, front independent suspension with front stabilizer bar and MacPherson struts, clock, low fuel level warning, tires and wheels (not too fancy...), intermittent wipers, ventilated front disc / rear drum brakes, 4-wheel ABS, traction control, stability control, dual front side-mounted airbags, front and rear head airbags, passenger airbags with occupant sensing deactivation, front seatbelt pretensioners, rear door child safety locks, child seat anchors, tire pressure monitoring, electronic brakeforce distribution, 5 person total seating capacity, electric power steering, tilt-adjustable steering wheel remote driver and passenger exterior mirrors, 12V front power outlet(s), air conditioning, front reading lights, 4 speakers...

As far as I can tell, the Apex has no air conditioner, stereo, air bags, set belts, doors, locks.....

Is it all about volume? The engineering behind the extra 40 HP?

Don't get me wrong - I'm likely going to drop the cash on an Apex in the Fall (whether an XTX or base model is yet to be decided) assuming Yamaha has some meaningful rebates... But where does my money go?

Wasn't this motor well engineered in the motorcycle world and over the last few years? Wasn't the EPS worked out on the ATVs?

Again, the SMILE on my face getting off that Apex was worth a lot... But 13k+ is a LOT of cash.

Thanks.

dnj

 

[Turk]

Do the math.
They sell about 500,000 cars at least to every sled.
Might be cheaper to produce????

 

[CaptCaper]

I'm guessing its about volume. More hands on in building from ground up. More precision componants maybe. In the old days if you rev'd up a car engine to 10,000 rpm for a long mile it would blow up. Don't know about the new ones.
Outboards in the $150 range have been 10k or more for a while. Seasonable stuff,long hands on build time and volume

I payed $45,000 for a pickup and I got away cheap with little options. Tires are $1,100 and up alone.

 

[APEX 06]

Yamaha and the other OEMS put in alot of money into R&D and building them. I say paying about 13000 for a yamaha that will run longer then I will its not that bad. I have two apexs and with some work over summer they run like new ever year. I keep telling the wife its not a poor mans toy.lol

 

[dab102999]

I keep telling the wife its not a poor mans toy.lol

Hit the nail on the head, I got a buddy that always complains about how much it cost to snowmobile....After 20 plus years of sledding myself I can honestly say with out a doubt if you want to save money snowmobilin, don't snowmobile!!!

 

[dnj1965]

Do the math.
They sell about 500,000 cars at least to every sled.
Might be cheaper to produce????

Thanks. I am trying to "do the math" and asked here in hopes folks could help with the numbers and factors to take into consideration.
Please don't get me wrong - I'm not saying they are not worth the money, I'm just trying to understand why they are priced like they are.

Unless I'm missing something, if you were serious in your response then you are off by a factor of a 1000. Worldwide, all manufacturers included, it looks like there are a little less than 500 new cars sold per new snowmobile sold (about 80 million compared to about 160k). Of course there are many more car models and manufacturers than there are for snowmobiles, and, again, there is a LOT of equipment and safety testing on each new car model that is not on a snowmobile. Thus doing the math is a little challenging.

It is clear from your and other responses (thanks all!) that the R&D and production costs per snowmobile unit sold must be staggering...

I can't find where Yamaha lists how many Apex units they sell per year, or how the snowmobile division does for them financially, or whether the R&D on an Apex feeds into a Nytro or Phazer, or if different teams work on the different models with very little crosstalk....

Obviously it is an expensive toy/hobby compared to knitting, but very cheap compared to cigarette boat racing... I'm not complaining, just trying to understand.

 

[blueironranger]

Also, the CHEAP cars should be compared to Cheap Fan cooled sleds for price, The APEX should go up against the likes of the Corvette and GT500

 

[RunninRX1]

It's the volumes that dictate the pricing. Lower volumes and you pay more for each component and it takes a bunch of components to build a finished product.
As an example, I manufacture electronics devices. My R&D costs are usually fixed per whatever device it is that I am currently developing.
If I pick a micro-controller for a new device that costs $23 in single QTY, I may pay $20 for 1000 of them or $11 for 20,000 of them. When I sell a product, I need to make X points (margin percentage) to keep the doors open, pay my employees, make a profit, all that stuff. That X remains the same if I sell 1 or 1 million. So if I produce 1000 units, in order to meet my required X, I need to price them to my dealers at a higher cost than if I produced 20,000 units.
Of course when I produce say the 20,000, that gives me some wiggle room to move margins around to my dealers to help them out, or put some pressure on my competition as far as pricing goes (price war).

 

[quebecmoutainrider]

like you said..you are going to buy anyway.. you can buy a polaris. .for 6000$...lol..but you want the best. .if you wanted a good sports car,would you buy a Miada.. .or a ferrari..now if you compair the two cars..now thats a price difference. .compair yammie sleds to the rest..they are not like the cars ..pay just a little more than the inferrier sleds...lol..you are getting top of the line..did you want cake with it too. .lol..

 

[morg]

Sleds are expensive for the same reason divorces are....they are worth it. Hehe

 

[whitedust1]

It's all about volume. Read in Snow Tech Yamaha only going to make 3,000 or so. $15K MSRP is high but if you are willing to pay it Yamaha is willing to take it. Yamaha has to make money with 2011 Apex coming off recent losses. Is there $15K value in a new sled with limited opportunities to ride? Hard to say & up to you. I think snowmobiling as a sport has peaked. No way for a newbie to get in without spending big bucks. New Truck or SUV trailer & a couple of Apexes you are talking $80 to $90K. Who has that for a few riding trips? 2011 Apexs are great sleds but I don't think many will shell out $15K for any snowmobile.....just too much money. If you do buy one lock it up or won't be there in morning. lol

 

[grader]

the profit margin on sleds must be huge. take skidoo as an example. 425lbs of aluminum and plastic compared to 2000-2500lbs for the small cars mentioned. gov. regs. on cars- airbags,seatbelts,crash tests, handling,rollover etc. just to name a few and the cost to have the tests done and pass them so the car can legally hit the road. sleds- headlite, brakelite, brakes, killswitch, no tests for stopping distances, impacts, etc. simple 2 stroke disposable engine. even the e-tech is old tech. my guess is cost to build them is $2000 and the rest is profit. the 4 strokes (all brands) cost more to build but there is still a lot of profit left, as seen by all the cars with the 4 stroke engines.

 

[pdiddy]

Wow, I agree the latest sleds are sick expensive - glad I bought my Vector in '05 for $7400 OTD - I had a feeling then that it was a bargin compared to the '05 600's when you consider the amount of "engine" I was getting for my buck. On the other hand, the casual snowmobiler can get started dirt cheap with a 5 year old sled - so it doesn't have to be such an expensive sport. I've restored a couple older sleds to get my kids started and have been having lots of (low milage) fun with that. If I was putting on more than 1K miles a year though, I be cruising craigslist for cash strapped owners of 1 or 2 year old sleds. BTW, just unzip your jacket for some free AC!

 

[Rockmeister]

the profit margin on sleds must be huge. take skidoo as an example. 425lbs of aluminum and plastic compared to 2000-2500lbs for the small cars mentioned. gov. regs. on cars- airbags,seatbelts,crash tests, handling,rollover etc. just to name a few and the cost to have the tests done and pass them so the car can legally hit the road. sleds- headlite, brakelite, brakes, killswitch, no tests for stopping distances, impacts, etc. simple 2 stroke disposable engine. even the e-tech is old tech. my guess is cost to build them is $2000 and the rest is profit. the 4 strokes (all brands) cost more to build but there is still a lot of profit left, as seen by all the cars with the 4 stroke engines.

The GROSS profit margin MAY be huge.
However the FINAL profit margin (net profit)is usually a very different story, and many times may even be negative.

Most overhead costs are huge.
Just a few examples are:

Insurance
Legal fees
Taxes
R&D
Factory Salaries
Management Salaries
Rep Salaries
Phone personnel Salaries
Distribution Salaries
Distribution costs (Planning, shipping, etc)
Generation of Spare parts inventory
Maintenance of Spare parts inventory
Electric
Gas
Building costs for Factory
Building costs for Distribution
Factory equipment (Presses & other Machines, etc)
Distribution Equipment (Forklifts etc)
Tooling (Molds etc)
Tools
Uniforms
Etc, etc, etc...

These are ONLY the costs I thought of immediately, there are many more.

Many of the overhead costs are relatively fixed whether they sell 10 or 10,000 units.

This doesn't even take into account the quantity discounts they lose if they don't sell enough of them.


When you think about it, in effect, there is NO such thing as a business cost OR a business tax.

YOU & I, the end consumer, pays 100% of EVERY cost involved, that or the business goes out of business, and you cannot get that product anymore.
(Unfortunately, most of our schools do a very poor job of teaching this.)

Even if you don't know this, the government does know it, and they pass business taxes all the time, knowing that most people never realize it is a hidden tax on you & I, and is therefore easy to pass.

You & I (the end consumers) pay for every single cost involved.
When someone sues the manufacturer(win or lose), You & I pay.
When their electric goes up, You and I pay.
When the government passes a "Business Tax", You and I pay.
You get the idea...

All of this is very basic business, yet rarely understood.

Most companies try to do a good job of estimating their future sales so they can anticipate their costs per unit and earn a small profit margin.
Prior to knowing actual sales, it is always an educated guess.
(And always a risky guess.)

Can't speak for this one manufacturer, yet this is all pretty universal basic business.
(NOT speaking directly to grader either. )

Just trying to help shed a bit of light on the subject.
(I don't want them to cost more than $1000 either!)

 

[kinger]

It is EXPENSIVE to run a business now days. The days of good ole hand shakes are done. The factors Rock listed above is just the surface. I cannot believe how much overhead I have in my business that I designed on paper before starting it to be ULTRA low overhead.

Rock is right anything a business pays we all pay we have to.

What I think is flawed in the equation is the dealers. It seems they make the most money for the least effort. I have never seen a dealership markup but for the way quotes vary I would say they take up at least $2-3000 of the cost of the sled. I know they have overhead as well but its so much easier to manage then a manufacturer.

Eitherway you look at it EVERYTHING is expensive now days you need a 100K job just to have a middle class life now.

I am very fortunate but I really dont understand how people making $40-50K a year combined family income make it.

Aside from that wait for a used apex or closeout with the prices they way they are people arent going to be flocking to get them and if they do great but you can shave 3-4K easy from retail if you buy a lightly used one or find a desperate dealer.