How much profit (after costs) do you think a company like Cigarette is making per boat? $10k, $20k, $50k????

At the end of the day it is all about, "we build it and charge what we do in large-part, because people will pay it", it boils down to price elasticity. Additionally, look at labor in the US vs. say... China. It costs about $10 to make a pair of Nikes, but they need to pay the endorsement money to guys like Tiger, so they charge $100 for a pair of kicks and people pony it up! Your not going to make a pair of those in the US for that kind of dough. Same with a high-end performance boat, I don't imagine that Mike (Fiore) is paying his guys $8.00/hr to build his boats. Is a 42' OL worth close to $1 mil.? - it is if someone is willing to pay it. Something is only worth what someone else is willing to pay for it. However, Formula is a PRODUCTION boat company, building hundreds of units a year - so $190k (list) price for what is really a 25' boat is just CRAZY in my mind! Their 24' bowrider (that was in PB recently) STARTS at $98k w/ a 496HO in it!!! If you want to dial it back a bit, you can get the 496 mag starting at $91k - such a bargain. LOA is 24' with a generous swim platform hanging off the back. And we wonder how Scott just bought a Hydro team!?!? Right there is your answer...

It's not the first time they were crazy with a price. My 30 footer with 420's and Kaama drives listed for $148,00, in 1986 dollars! I would venture that's why it never sold from the dealer, and sat in dry storage until 2001, when it was first titled by the guy that bought it before me. It had 42 hours on it in 15 years.

You can buy the whole boat for less than one new 525 engine alone.

That pretty much sums it up. You can thank $75 per barrel and the dramatic increase in metal prices for a lot of the increase too. A large portion of materials are petro based, even the foam in the seats. Raw materials have doubled in the past 18 months.
However just building the boat and tacking on a reasonable profit doesn't begin to cover what it takes to make the business profitable.
TS

While I agree with most of what is being said, it does not cost that much to build a boat, comparing it to a house is actually a good analogy. It is what people are willing to pay, I am not willing to pay it but others are. If boat sales drop to nothing you will see prices come back in line with what it costs to build a boat.

Also make sure Mercury shares the blame here, have you priced what a 525 w/ bravo drive costs, thats the single most expensive part of a boat today.

Don't worry we are heading for a recession, it all cycles, prices will be down in 2 years.

WILL

Had a close friend chomping at the bit to by my cig. So I went to a new Cig dlr in Sacramento area to spec out an 06 30', leather, most the bells and wistles and t525s w/ alum myco trailer= $349,000-
Additionally, this 'new cig' store sublets all the service because no service dept (how does Cig allow a franchise dlr to not have a full service dept?).
Needless to say, I am keeping my ol' cig.

Ding ding. Rings true as usual.

I think it's "perceived value."

I have said it many times and will again.
Boat values= a boat is worth what someone will pay you for it. No more, no less.

The guy buying my 20 year old boat for 15 grand mentioned the 9 grand NADA value.

I told him if he wanted to go find an average boat to go with that average value it would not look like mine.

He bought mine.

Yes, but first they had to drive out the competition through exclusive fiduciary agreements with manufacturers and an agressive PR/marketing program.

In a high hp application I would prefer a custom high hp drive system. NOT a bravo.

In a normal hp application I would prefer a Volvo drive.

It's just harder to get T shirts and stickers.

I went on the Formula factory tour over the winter. And one thing that stuck in my mind was the fact that they build aprox. 800 boats a year.
It's a huge facility, impressive equipment, and they put out a quality product.
They still have molds and patterns for your older boats if you needed to replace something.
But, only 800 boats a year. They have to bring a big dollar to support the R&D, and, because the performance and bowrider market is the most popular, price them high. By doing that, it would allow them enough profit to make the big cruiser's that they probably make very little on due to the extensive labor, detail, and limited market.
But, if you have it in your head that you want to crack the "big cruiser" market, that's how you do it.
Just a thought.

I would like to hear more from Salesmanship and other builders as I think you couldn't be more wrong.