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Techno
05-16-2001, 08:32 PM
Since a 2-cycle has fewer moving parts, except for the bearings, Why does it cost so much. It seems a fairly straight forward casting with little machining. The water passages on the heads ore bolted on and not cast in place. I know greed has a lot to do with it but why the enormous cost?
Also why the extreme cost of a drag engine? Does it receive any hand work like porting to increase the cost?

TTriton
05-16-2001, 09:08 PM
Mostly its because people will pay it. Plus like aircraft everything is more expencive. On the other hand I've always heard that there is a bunch of cost involved with making the cranks plus the cost of aluminum and stainless steel. Plus as you mentined the bearing are much more expencive. The rods have to have hardened bearing races to run needle bearings costing more. These are just my ramblings I'm sure there are several people that can point out other factors or shoot down my ideas.

Raceman
05-16-2001, 09:11 PM
You hit the nail right on the head.....greed. It's called charging what the market will bear. For the same reason that Exxon just posted the biggest profit in world history and we're still buying gas from them at unjustifiable prices. For the same reason that the big 3 car companies put billions on the bottom line of the financial statements while we finance cars now for 60 mos. instead of 24 or 36 like our parents did and many working couples in this country spend more on their car payments than home mortgage payments. For the same reason that Congressmen, once they're elected have a free retirement program that WE pay the bill for (they're exempt from social security taxes like the rest of us pay) basically paying them their full salary after they retire, but the rest of us are wallering in a potentially bankrupt social security program that may or may not even put food on the table by the time we're ready to retire. The real reason is greed and the fact that people like me bitch, then do nothing else, then pay the damn prices anyway. The reason is we're a bunch of suckers. I'll step down off my soap box now.

thumper
05-16-2001, 09:27 PM
.

ODDD1
05-16-2001, 09:36 PM
Techno, if you think they are so damned overpriced, you got 2 options....make more money or BUILD YER OWN DAMN MOTOR ! NObody is makin you buy mercs hardware...all customers expect WARRANTEE, PRODUCT IMPROVEMENTS [every year],WARRANTEE, MORE HORSEPOWER, LESS WEIGHT, OH,did i mention WARRANTEE? OH yeah, its gotta look good too.
Somebody else want the soapbox?

Shep
05-16-2001, 11:12 PM
There are millions of car motors built. I/O's use these same basic models ( ie: tooling) outboard are produced in realitivly small numbers so the cost per unit is higher. Simple Economics

Greg Moss
05-17-2001, 07:44 AM
What people don't realize in the cost of your motor is all the engineers, the manufacturing, warehousing, distibution, advertising, these all have to be differed over the price of the product line. If you look at the price of a piston for a small block chevy compared to the price of a 2.5 you can get a set of 8 for the small block for the price of one for the 2.5.Why this happens is Chevy makes 500,000 small blocks a year compared to 5000 2.5s. This is a much bigger number of product to spead the costs over so the price to manufacture is cheaper. also it cost less per part to to tool up to make 1,000,000 parts than 1,000. I go to the SEMA show evry year one year I was walking down the aisles that hase all the machines on them and spotted a blang crank and a finnished crankall but the splines. It was a crank for a 2.5 v-6 Merc.I asked the guy a the display about the maching It was the size of a garage and cost 3.5 million dollars that is why you cranks cost so much. All the equipment that is specialized for your outboard to be made has to be paid for by some one. You all just happen to be the ones that have to pay for it. Greg

Raceman
05-17-2001, 03:36 PM
I partially agree with yall about low production, higher prices, and the warranty thing also. But I'm sorry, I think 20K plus for a 300 drag is price gouging pure and simple, and there aint no warranty, and the basic design's been around for a while so the major engineering cost should have been long since amortized. While the present design may be a sophisticated animal, and the improvements ongoing with substantial horsepower increases, it's easy to see it's heritage in 76 model 1750's that cost the dealer less than 2000 bucks.

[Edited by Raceman on 05-17-2001 at 04:31 PM]

Greg Moss
05-17-2001, 04:45 PM
Now you have to figure inflation into the equation a little bit in 1976 the Corvette sold for $6500 today it sells for $60000. That makes the price of the new motors in line with the price increase of cars. Another thing you have to figure about the price of the new 3oo drag is product liability. Now matter how Mercury markets that motor as a race only engine or all the releases of liability you sign. you still can not sign away your safety and if you get hurt or killed while useing the motor some lawyer will still sue the **** out of them. for this reason 20% of the price you pay for any product is liability insurance. That is $4000 of that $20000 that Merc wants for it. Also the manufacturing process that is used now is a big improvment over what was used in 1976--lost foam casting is one. Now who has to pay to develop that technology, YOU DO. I am sure Greed has a small part in it the stock market rising is proff of that. Mercury has to look at the bottom line and has to feed money to Brunswick but I think that is a small portion of the price of the motors we buy. You can have the soap box back now. LOL Greg

Greg Moss
05-17-2001, 05:02 PM
have you not been reading the above posts?

ODDD1
05-17-2001, 09:23 PM
another demeeecrat......

Promax300
05-18-2001, 06:09 AM
greg, i did not realize you were a mr know it all, where do you get all your facts from ??

jimmyb
05-18-2001, 07:09 AM
do you guys have any idea what a die cast tool for a v-6 block costs? Let alone the machine, facilities, and the personel to operate and design it... merc racing has its own V-6 block dies.

while the 2.5L drag motor has its ancestry going back to the V-6 motors of the 70's, the amount of design, testing, tweaking, blow ups that has occured over the years to come up with the current F1/drag motor is mind-bogling. It is litterally a culmination of 20 years of research and development.

Also, with the new drag motor, there might be 50-100 of them sold this year. All that work to sell less than 100/year. Just look at the svs front end... merc doesnt get much of a break on that from brucato (why would brucato sell his product to mercury at a deep discount when he is selling as many as he can produce directly to retail markets???)

think about it... during its best years, merc racing cranked out over 1000 outboards (including the promax motors). Small carengine manufacturors like ferrari, mosler, lingenfelter etc. crank out low volumes and look at their prices... see the trend?

JWTjr.
05-18-2001, 08:13 AM
I agree with Raceman...there's no question that it is price gouging--due simply to a lack of viable competitors in the high-performance outboard market. Let's compare to something very similar...the high-performance snowmobile market. There are four competitors in this game and they re-tool engines and sleds just about every year so the R & D and tooling costs are astronomical compared to actual sales revenue. Of course they do this even though hi-perf sleds only account for about 5% of sales due to the very real fact that if they're on top of the performance game, they'll sell lots of family & sport sleds. Now let's compare costs vs. sophistication. Today's V-6 Drag motor is a refinement of a basic design that existed in 1976, and has evolved from there. Sure the ignition, rotating components, induction and exhaust have been dramatically improved, but it's still using pretty much the same centersection and gearcase. Even in thier latest iterations, these parts have been the same since the mid-1990s. Those tooling costs and R&D expenses have long since been amortized. Today's snowmobile has a WAY more sophisticated engine (making 3+ horsepower per cubic inch versus the 2+ per that the Drag makes); they use variable exhaust port technology, make gobs of torque, use a transmission, and the entire sled--not just the engine--retails for less than $8000. Remember that after you spend $20k on your Drag outboard, you need a boat to put it on. Liability? Please. I guess the sled manufacturers have nothing to worry about compared to Mercury. Today's top consumer--not race--sleds go 0-60 in less than 4 seconds, top out at over 110 mph, and they're used on tree-lined trails to go from bar to bar. No liability there! The arguments supporting Merc's pricing don't wash. They are supported by all of us who continue to buy--with no other option. I know, I'm as guilty as anyone--I just bought another one!

JWTjr.

Greg Moss
05-18-2001, 08:33 AM
You are right about the cost difference but look at it this way. With the sleds the product line is smaller.It's easier to amorize the engineering cost between 6 products than 50. As far as the liability the sled manufactures still have it, Part of the cost of that machine is product liability insurance. ALL product have to have it to protect themselves and the costs keep going up. On of the biggest mistakes the US gov. ever made was making it leagle for lawyers to advertise, all that acomplished was drive the level of settlements up so the bloodsuckers can claim bigger money gains in their advertismnets. As far as the difference in the technoligy in the motors look at the room in the engine compartment of your sled. see all the room for exhaust? where is it on your outboard? did you see the chamber project article on this board? those things stick out 5 ft. to put all that under a cowling woould take a cover bigger than OMC V-8. Exhaust technoligy is where alot of the HP difference is between the 2 machines. There just is not the room for it on the outboard. All the outboard manufactures do a good job of getting the HP out of what they have to work with. If Yamaha and OMC ever get into thew HIPO motor bussiness the only thing that wil accomplish is have 3 high dollar motors on the market.

Firestarter
05-18-2001, 09:26 AM
Great thread.
This is one of my greatest peeves-----Mercury. Having worked for 5 years to put myself through school at one of Canadas largest mercury dealerships (we had sea ray, persuit, tige, sail fish ,and allison) We sold hundreds of boats a year, and if you think that merc would stand behind one of its platinum dealers you are on glue. They don't cover their warranty ( imagine spending 60k on a new sea ray and the bravo blows up and merc won't cover it---so the dealer does)When it came to the marina building their new aluminum work boat they put in a volvo. How is that for faith in product. It is a diesel, injected turbocharged, supercharged, drive by wire, marvel with it's dual prop.
The merc verson was 8k more expensive and not near the quality, not to mention volvo sent up a tech to help with the install, merc wouldn't even return calls.
As for the outboards, in 1993 I bought my first 2.5 and paid exactly 10k for it, I then bought a 1998 2.5 and paid 22 800 for it, and the difference is almost nil, except that the 93 had better parts in it. (cdn dollars). I now have a 2001 drag, bend over and cough 30k. I feel as though I have been rapped.
But like a lot of you I paid it so they will charge it.
You know if they want to charge that kind money they should at least give us a quality product.

go bombardier go.

RT

jimmyb
05-18-2001, 11:40 AM
if the outboard market is so lucrative, and mercury is just rolling in money, why havent the other manufacturors come in with their own "race" product to try and get some of mercury's customers???

wherever there is easy money to be had, you usually see a lot of competition, and then the price comes down and the market evens out. Why hasnt this happened in the outboard industry??? Perhaps the money isnt as easily made as what some people think? Could it be that there is much more initial investment than most people realize?

Raceman
05-18-2001, 03:26 PM
Jimmy I had a relatively large block of Brunswick stock in my portfolio until Dec. 99 when I pulled out of the market completely. Of course during this time I got quarterly financials. Mercury is by far the most profitable component in the Brunswick Group, and I want to emphasize BY FAR. Nobody questions that it's a very well run company from a stockholder's standpoint. My opinion, and it's just an opinion, based on NO financial data, is that OMC had some real problems at the top and turned some real oportunities into setbacks through extremely poor management decisions. I'm sure some of this was based on their admitted lack of financial resources, but it'll be interesting to see if Bombardier proves to be a formidable competitor. They've certainly got the resources to do most anything management deems appropriate. They did buy a pleasure boat line in the mid 90's (I think Celebrity????) and drop it like a hot potatoe after just a couple of years of effort though. Unfortunately their products also always seem to stay at the top of the heap price wise too, so if they do make a mark in the industry, I think they will target performance, inovation, and dependability, rather than price.

Firestarter
05-18-2001, 04:05 PM
Raceman you are bang on. I am in the position that I can look into the financial history of any public company in the world, curtesy of my Bloomberg. And I can tell you Mercury keeps brunswick afloat.
It also amazes me how a small shop with extremely limited resources can creat more hp, and IMPROVE reliability considerably, yet merc continues to charge more and more for a product that gets poorer and poorer parts inside it.
The tooling for that 2.5 series is nearing in on 10years of age, in most cases that would mean that the tooling has long since been paid for, and the price should go down---or realisticly stay the same, of cource adjusted for inflation. Merc should have had little work in creating the 2001 drag motor, as most of the pro gas and pro fuel motors are suprisingly similar----and oddly very reliable. I also find it ironic how well known in the business world merc is for outright screwing people, and hense loosing that partner. It is interesting how brainwashed all merc employees become, as they have no competition it is easy to be a god.
One day hopefully sooner than later their will be some competition.
Bombardier does like its margins, they also like to dominate the market (air, train, ski/sea-doo).
And because of this desire to dominate----they will, mark my words make an offer to us the consumer that will be a serious threat to the fat cats at merc.
Jimmy you are an asset to this board, and your insight is excellent and greatly appreciated, but I wish you would look at your product the same way your customers do, because if you screw us we WILL given the oppourtunity go elseware. And the Drag motor is a considerable slap in the face. Merc is slowly pricing themselves out of the market.

That is my 3 cents (2 cents U.S.)

BK
05-18-2001, 06:17 PM
This is gonna hurt!

http://www.tradeonlytoday.com/Today_s_News/genmar_ctoday_s_news.html

“For the first time, Brunswick engines won’t be offered as an option on several of our boat brands,” said Irwin Jacobs, the Genmar chairman.

Although he declined to cite specific numbers for the Mercury cutback, or which boats will be involved, Jacobs said it will go from “major to very minor.” He estimated Genmar was previously getting some 30 or 40 percent of its engines from Mercury.“This is not a vendetta. This is a business decision.”

Jacobs said the cutback has nothing to do with the problems that surfaced recently with some of Mercury’s 2001 OptiMax outboards, but rather was related more to the cost of the engines.

Calling Mercury engines “non-competitive in our boats,” Jacobs estimated these engines are priced 10 percent higher than the primary competition in the marketplace. That’s why his company has committed to buying engines from Bombardier Inc., which recently bought Outboard Marine Corp.’s Johnson and Evinrude business, as well as Yamaha, Suzuki and Honda. The Minneapolis-based boatbuilder also plans to step up its relationship with Volvo Penta for sterndrive engines.

Tim
05-18-2001, 06:54 PM
corvette because i bought a brand new 79 corvette in 79
and the window sticker was $ 13,500 wrote a check for it
for $ 12,000 jued em down $ 1,500 that was about the best
they would do!. thats damn near twice the price of the 76
you mentioned earler. you could buy a Z/28 or trans-am
in the $ 8,000 to $ 9,000 range back then depending on
the option,s it had, and we bitched! and though that was
HIGH!. now you will be lucky to buy a saturn,yugo,daewoo,
hyundai,or any of them other little car's with the winding
stem stuck out the back, one like Im going to be driveing!
when gas get's about $ 2.50 a gallon.

LaveyT
05-18-2001, 07:12 PM
I just dont get it,Why pay $25-$30 grand for a 2.5 drag? Wouldnt it be cheaper to buy an "old" 260 and send it to the best engine dude in the country(in your opinion?).Thats where its going to end up any way in 100-200 hours? My ego aint that big!Merc has excellent technical support but they didnt want to fix a flywheel(magnets)for me.It was a sh..job for them.If you dont have $800+ to spend on a new one tough ****.Technical support is not gonna help ya if you aint willin to pay through the nose.Put my vote in the price gouging side.

Rickracer
05-18-2001, 09:29 PM
Seems we aren't the only ones that think Merc's prices are getting out of hand. This Genmar thing is gonna hurt Merc where it really counts, on the bottom line. I doubt if it's going to change their strategy much though. Only time will tell. The competition will force to them change, or they will die. It's about time too. I do applaud them for supporting the motorsports that they do, but believe me, it's all about the money, not because they care. "Win on Sunday, Sell on Monday" still holds true. Shrewd, but not endearing. I don't hold a grudge, but I sure am glad to see some competition starting to crop up, to break their stranglehold on the market.

Techno
05-19-2001, 08:58 PM
I never thought this thread would "pull" like this. I still don't see why not just a drag, but all the other engines cost so much. I know capitalism has a lot to do with it but really! Aren't All the bigger mercs basically the same? They just detune to get a market spread. Tooling? Research? Where is it? I looked at my old inline and it looks better than the 2.4 It has all these neat looking cooling fins all over it. Now that had to cost to add that.

jimmyb
05-21-2001, 12:28 PM
first, let me just say that I am not a brainwashed employee... :) I am also not politically stupid and wont bite the hand that feeds me. I am a boater just like you guys. If I didnt work at mercury, I would still be running a old 200 carbed motor hoping that nothing would break, cause I wouldnt have the money to rebuild it. I am just giving the logical, engineering explainations why things cost so much. Just start imagining the amount of overhead a company like mercury has to have to stay in business...

It might be true that some smaller engine builder can take a mercury motor and make it better than a drag motor for less money. However, that smaller builder doesnt have to pay for the for the guy sweeping the floor, answering the phone, stocking the stock room, manning the machines, measureing the part, selling the motor, designing the motor, etc. etc. Small builders dont have much overhead, so they can be cheaper. Also remember that small builders shouldnt really be called builders, cause they dont build, they modify. There is a big difference.

as far as the whole genmar deal, i will be very interested to see how things turn out. It might be just be a corporate war of words... time will tell.

Greg Moss
05-21-2001, 06:30 PM
I was not surprised by that at all. Irwin Jacobs is shrude. I knew that hole thing was going to happen after they got controll of OMC. That was one of those i buy the boat part you but the motor part and I use your engines That way we keep Mercury from dominating the marine market.I don't know how many motors he was buying from Merc but Volvo and Bombardeir have to be happy about selling him motors for the lines he aready had. I know Glastron had to be buying a bunch of them from Merc. Maybe that will give the market some price stability and reallity.

Barney
05-21-2001, 06:47 PM
At least one dummy in here might figure we don't have to wait for Mercury, we could change things.

Sorry to interupt, I hope this thread is not just for bitching.

I like to do things not just talk.

ODDD1
05-21-2001, 08:24 PM
I agree that merc has been resting on its laurels......GOOD competition [in any market] will benefit suppliers and consumers, with increased quality/technology and lower cost....Bad competition just drives manufacterers and consumers out of boating.....think how many people are unhappy/out$$$ because omc went tits up? in the short it benefits merc with increased sales but in the long run it will hurt us all.....not even mentioning that great dragon EPA has one less "villian" to roar at....

LaveyT
05-21-2001, 08:44 PM
I did do something,I bought a brand new OMC!How many dollars have you sent to Mercury in the last twelve months?
Since I bought an OMC Merc prices have dropped Im sure.Im doin my part to bring YOUR prices down:)
Just my opinion,Pretty sure im rite

Barney
05-21-2001, 11:02 PM
I know Mercury produces very few high performance engines per year. A large portion, if not all the buyers of these motors visit here, are members here, or at the very least know members here.

With a planned, effective stategy we could literally put a stanglehold on Mercury, if WE could act as a group, a political power so to speak.

Lets face it, we are our own best customers. I'm really sick of people wanting to complain and do nothing about it. Acting on an individual basis does not help the group.

It is a very simple plan, do you really want to hear it?

Don't hurt yourself patting yourself on the back just yet LaveyT, we should be getting wholesale prices on ALL PRODUCTS we use, Mercury products. I do not want to suggest anyone to go buy OMC, but it should be an option at wholesale or below cost!

LaveyT
05-22-2001, 05:13 AM
Point well taken,after you cleared it up for me.Doug G. down in the Keys said the same type of P.A.C. was needed to lift speed restrictions on many bodies of water around the country.He said we needed to get our heads out of our ----.
Or hotboating would become a thing of the past.
How do we Organize?Throu ABPA or another association?
"The Million Outboarder March" Rite through the capital.We would Probably do well untill half our troups went in a bar:)

mercrazy
05-22-2001, 07:57 AM
one area no one has mentioned about mercury is the mytique. they are similar to harley davidson. harleys still dominate the market when you can buy supposedly higher quality bikes for 1/3 of the price. wonder why this is? my theory is it's looks and sound. harleys have a distintive look and everyone likes their sound...even cops and old women. merc is the same way. they always have stylish cowling that doesn't look like an old gray washtub and the sound of 10,000 screamin rpm's always sends a chill down my spine. some people are satisfied just getting from point a to point b and any of the big motors will move them sufficiently, but i wonder what they do for exitement. it all boils down to what you want...a harley or a honda, a ferrari or a ford, a merc or a truck motor. i'm almost 50 years old and i'll gladly pay a little extra for anything that still gives me a chill.

Rickracer
05-22-2001, 08:15 AM
there wouldn't be a problem.

Barney
05-22-2001, 11:52 AM
I agree with both of you, we need choice and we need to be organized to protect our own interest.

The key is WE ARE ORGANIZED, look around. I would say we are the most informed, knowledgeable, helpful, organized group of boaters in the nation, maybe the world.

WE ARE our own best customers now, we represent the core of high performance $$$ and influence, period.

If we were to mount a structured campain, as a group, we could take over high performance outboarding, as a group.

I would love to help so many people at the lake that approach all of us, we should, but we should get paid for that effort too!

We can all get what we want here, right here, right now!

Or was this thread just about talk?

LaveyT
05-22-2001, 06:57 PM
Simon says,Destroy the world!!!!Wait a minite what was this thread about?

Techno
05-22-2001, 07:54 PM
Barneys got the right idea. The Performance Boat Club of Canada did it. There's a whole lot of groups that have organized and got somewhere.
So what do we do, circle lake X with our rigs or what?
Maybe put different stickers on all the Mercs, like Northrop or Ferrari?
All write a letter " We're all fed up and we're not going to take it anymore!"
I don't have any idea what to do here.
Barney any ideas?

Markus
05-23-2001, 04:36 AM
Besides what you guys have already describe in terms of short manufacturing series and a complex product range, I believe that OMC's under-performance has been a key driver of the dynamics of the outboard industry.

Since everyone (Merc, Yamaha, Suzuki, Honda etc) has been happily chewing away on OMC's market share, they have been able to grow healthily without competing head to head, and have been able to charge for complex products and product ranges without getting their margins squeezed.

Therefore, Yamaha, who would be the prime contender, has had opportunities enough on standard engines, and has not needed to bother about competing with Merc in the high-performance segment.

If, on the other hand, Bombardier starts to make life a little bit more difficult for the other players, I think that high-performance will look increasingly attractive to players other than Merc.

Barney
05-23-2001, 09:28 PM
The basic idea is NOT to alienate Mercury, seems they have a great product, but the profit margins they hold over US is ridiculous!

I know Mercury hi-perf. dealers experience a 30-40% discount over us, now if your a hi-perf dealer and you sell boats with Merc engines, another 30% off based on the ability to sell volume. What dealer represents more volume than us?

So they basic plan is that of MLM, Multi-level Marketing.
We are our own best customers, the more of our products used or sold, the greater the discount or return.
Scream and Fly Amway! No soap just our boating products.

Rather than blackmail Mercury, I know they would be drawn to, would want to offer incentives to a group with 500-1000 sales people.

What manufacturer would not want us!

I personally have set-up MLM's, negotiated contracts, might even have the software on hand.

I know we as a group could guarantee more production, engines, props, parts than any single dealer out there.
Dealers that are in our group would be regional centers for us, they also should experience greater discounts to be able to make up any losses in retail. They, just like the mother corp MUST BE PROFITABLE, that is key.

We could sell service, regional centers or member dealers, glass work, everything related to our sport.

I personally would love to help all they ya-ho's at the local lakes and get a motor every couple years for free!

Next key would be to form OUR OWN racing circuit.
Are there any memebers that would not like to race some if they were matched competitively?

How many members are in ODBA?

Anyone here smart enough to write some guidelines?

I'll be happy to lay this out in greater detail if your not seeing the broad strokes.

[Edited by Barney on 05-23-2001 at 09:31 PM]