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Supacat



Member Since: 16 Oct 2012
Location: West Yorkshire
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United Kingdom 2013 Defender 110 Puma 2.2 XS DCPU Keswick Green
How much does it cost to build a Grenadier?
So we know what it's going to cost us (roughly), what's it costing Ineos...

Following on from a post last year:

Some interesting things in the recently published annual accounts:

"The Company is currently developing its first product, a rugged, reliable and uncompromising 4x4 off-road vehicle named the "Grenadier". This vehicle is aimed at the following key markets: Corporates, Utilitarians, Lifestylists and Enthusiasts."

Choose which one represents you best!

"The Company is focused on designing and engineering the vehicle, establishing suitable manufacturing facilities, building up its internal organisation and developing its commercial, manufacturing and supply chain strategies."

"Following an extensive review of available sites and facilities, the company had previously decided on two green field sites, located in the UK and Portugal, on which to build its manufacturing facilities. As described under Subsequent Events below, the Company is currently investigating the potential acquisition of a going concern company that already owns and operates a suitable facility located in France. This facility would be capable of producing at least 25,000 Grenadier vehicles, in addition to the manufacture of another model that is already produced on site. Production of the Grenadier is targeted to start in late 2021."

"As at the date of signing of the accounts, the Company is engaged in negotiations regarding the potential acquisition of a going concern automotive manufacturing company. If these negotiations reach a successful conclusion, then upon completion of the acquisition the Company will own an operational automotive manufacturing site and will immediately be engaged in the contract manufacture of vehicles for a thud party. Production of its own vehicle would be introduced alongside this contract manufacturing operation towards the end of 2021. The previously secured green field sites in the UK and Portugal remain potential manufacturing locations should the current negotiations not conclude with an acquisition."

"The loss before taxation was €137,124,000 (2018: €50,996,000)."

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Still cheaper than a Dyson...

"The strategic aim of the company is to develop and build its uncompromising 4x4 off-road vehicle so as to meet all safety, environmental and legislative requirements whilst delivering flawless off-road performance. The vehicles are to be built in a world class manufacturing facility and sold via an industry disrupting omnichannel approach."

"There appears to be a general recognition by governments that a move to zero emission vehicles is essential for meeting their climate and air quality goals. Some have set target dates for introducing legal bans on the sale of internal combustion engines within the next ten to twenty years. The Company is addressing this issue by exploring potential zero emission solutions for its off-road vehicle and it recently completed a successful Innovate UK.funded feasibility study into the potential use of Hydrogen Fuel Cell technology."

"The impact of the Covid-19 pandemic is not yet fully understood and is therefore a source of significant economic uncertainty. To date the Company has been able to continue its development work at pace with a switch to home working, however we are starting to see some impact within our supply chain that in turn could impact on our supplier nomination decisions and the project timelines.

The Company's economic resilience will be supported by a balanced distribution of sales across the UK, mainland Europe, North America and the rest of the world and the positioning of the vehicle as a workhorse / utility vehicle as opposed to a luxury vehicle that would be more sensitive to changes in economic conditions."


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"The Company had not commenced trade at the balance sheet date. When trade does commence, the Company'strading activities are expected to be within the UK automotive regime, with tax relief for qualifying pre-trading expenditure available at that time."


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Post #928724 6th Nov 2021 7:10am
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Supacat



Member Since: 16 Oct 2012
Location: West Yorkshire
Posts: 11018

United Kingdom 2013 Defender 110 Puma 2.2 XS DCPU Keswick Green
This year's update:

"Ineos reveals third loss-making year in effort to make Land Rover rival

James Ratcliffe’s car company may have spent well over £650m on offroader project

Sir Jim Ratcliffe’s car company has made losses of more than £250m over three years as the billionaire businessman ploughs money into his effort to make a Land Rover rival that could also lead to new vans and construction vehicles.

Ineos Automotive, a subsidiary of Ratcliffe’s chemicals conglomerate, reported a loss of €106m (£91m) in 2020 in its latest accounts, adding to €188m lost in the previous two years. Ratcliffe’s other companies have also lent €471m (£403m) to the automotive subsidiary, meaning his total commitment so far may be well in excess of £650m."

https://www.theguardian.com/business/2021/...over-rival
Post #928725 6th Nov 2021 7:13am
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Orchard



Member Since: 07 May 2015
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£650m on a ground up car program seems expensive, particularly when the engine and gearbox is bought in (apart from tuning), and there's no factory to build. 2015 90 XS SW Bowler
1998 TD5 CSW
Post #936679 7th Jan 2022 9:42am
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DSC-off



Member Since: 16 Oct 2014
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According to John Wolkonowicz, Senior Auto Analyst for North America at IHS Global, "It can be as much as $6 billion if it's an all-new car on all-new platform with an all-new engine and an all-new transmission and nothing carrying over from the old model."

https://www.autoblog.com/2010/07/27/why-do...ew-models/
Post #936763 7th Jan 2022 10:18pm
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Supacat



Member Since: 16 Oct 2012
Location: West Yorkshire
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I don't think the £650m figure was actual expenditure at the time. The majority of that figure seemed to be loans/loans facilities.

Bearing in mind the purchase of the the French plant comes after these accounts reported.

If my maths are right it's €294m actually spent, but it's on a rising curve so who knows how much more between then and now?

As to what's expensive, I think a guy who's dropped $230m on two boats, probably has a different concept of value for money?
Post #936779 8th Jan 2022 6:16am
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Bluest



Member Since: 23 Apr 2016
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United Kingdom 2007 Defender 110 Puma 2.4 XS CSW Java Black
Years ago, when the Mondeo was at the peak of its powers I read that Ford spent $1 billion developing a new model, more than Airbus spent on the A380 or something. Grenadier seems a bargain in comparison. 2007 110 TDCi Station Wagon XS
Post #936788 8th Jan 2022 9:40am
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DSC-off



Member Since: 16 Oct 2014
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United Kingdom 2015 Defender 110 Puma 2.2 XS CSW Aintree Green
The first gen Mondeo was developed 30 years ago Shocked
Post #936814 8th Jan 2022 11:46am
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m0ondogy



Member Since: 04 Oct 2021
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United States 
It is an eye watering number for sure. Cool seeing it broken down that way.

Semi-related. I recall the late 90s S class was making headlines for being the first care/platform to cross the billion dollar development cost. If that's true and Mercedes is as good as they claim, I'm guessing the Grenadier is somehow cheap to make in automotive terms.
Post #936882 8th Jan 2022 8:55pm
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90 Dreamer



Member Since: 13 Jul 2019
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Bearing in mind he's a savvy business type then of course it wouldn't possibly be a nice tax loss for his other business(s)..... Cool
Post #936887 8th Jan 2022 9:03pm
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ADVAW8S



Member Since: 05 Oct 2021
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[quote="Supacat"]I don't think the £650m figure was actual expenditure at the time. The majority of that figure seemed to be loans/loans facilities.

Bearing in mind the purchase of the the French plant comes after these accounts reported.

If my maths are right it's €294m actually spent, but it's on a rising curve so who knows how much more between then and now?

As to what's expensive, I think a guy who's dropped $230m on two boats, probably has a different concept of value for money?[/quote

I agree with you Supacat. The majority of money spent has been in some form of loans versus out-of-pocket. The loans are probably backed by the assets of INEOS. I believe he has kept the cost down by reducing development costs. The INEOS team has done a great job outsourcing. The engine is BMW, axles from Carraro, Suspension from Magna, transmission from ZF. Think of the number of employees that would have had to be higher just to design and manufacture these pieces. Humans are the largest source of cost for any company.

The Grenadier is not vaporware like some of these other new start-up manufactures. The main reason being backed by the largest chemical company which is privately owned and they are building a product that is not to far outside the box and simple to build.
Post #936926 9th Jan 2022 2:09pm
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Danny Fireblade



Member Since: 16 Mar 2018
Location: Hampshire
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United Kingdom 1998 Defender 110 300 Tdi HT Alpine White
I wonder what the profit margin is on each vehicle sold? Bearing in mind if we average out each vehicle as £50k, it only takes them to sell 20 to make a million, which would leave a certain amount of profit.

The numbers soon add up then, especially as it’s a pretty basic vehicle to make compared to some of them out there so I’m sure he could keep overheads a little bit lower.

Once the testing and development is done, that’s it for about 5 years, excluding a LCI at about 2.5 years. I don’t think he will be losing money on each one.

After all, he does know how to run a business or two😁
Post #936940 9th Jan 2022 4:08pm
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