Interviewer view · keep this screen to yourself

From showroom price to carmaker profit in Europe

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Kavrin Motors (a fictional carmaker) sells a compact car in Germany for EUR 30,000 including 20 percent VAT. The dealer margin is 8 percent of the price before VAT. For each car, parts and materials cost EUR 16,000, assembly labor EUR 1,500, and logistics and warranty EUR 1,000. Fixed costs (plants, R&D, overheads) are EUR 3,000 per car at planned volume. What does the carmaker earn per car, and what is its operating margin?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Showroom price, minus VAT, minus dealer margin = carmaker revenue; minus variable and fixed costs = profit
- Price before VAT = showroom price divided by 1.2
- Carmaker revenue = price before VAT minus dealer margin
- Contribution = revenue minus parts, labor, logistics and warranty
- Operating profit = contribution minus fixed cost per car

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Price before VAT
What a strong candidate does: Remove 20 percent VAT.
Price before VAT (EUR): 30,000 ÷ 1.2 = 25,000
Step 2: Dealer margin
What a strong candidate does: 8 percent of 25,000.
Dealer margin (EUR): 25,000 × 0.08 = 2,000
Step 3: Carmaker revenue
What a strong candidate does: 25,000 minus 2,000.
Carmaker revenue per car (EUR): 25,000 - 2,000 = 23,000
Step 4: Contribution
What a strong candidate does: Subtract parts, labor, logistics and warranty.
Contribution per car (EUR): 23,000 - 16,000 - 1,500 - 1,000 = 4,500
Step 5: Operating margin
What a strong candidate does: Contribution 4,500 minus fixed cost 3,000 is 1,500 per car, divided by revenue.
Operating margin (percent): (4,500 - 3,000) ÷ 23,000 × 100 = 6.52

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Kavrin should protect volume and cut parts cost, because of the EUR 30,000 the buyer pays it keeps only about EUR 1,500 of profit per car, a margin of about 6.5 percent. First, VAT takes EUR 5,000 and the dealer EUR 2,000, leaving EUR 23,000 of revenue. Second, parts and materials of EUR 16,000 are the biggest cost, so small savings there matter. The risk is lower volume: fixed cost per car then rises above EUR 3,000 and this small profit disappears. As a next step, test savings from sharing platforms across models.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.