Labor is the single largest cost for any business. I’d like to see your source for “at most accounts for 10% of a manufactured item”.
Here is your answer:
in the US, it takes about 30 hours total, for the body, engine, transmission, assembly, paint, etc. doesn't include things like outsourced parts and mining the ore (or recycling old cars). the labor costs from $55-$70 per hour including benefits so about $2100 per car, or roughly 8% the cost of the average car. doesn't sound that high until you compare the tata nano, which costs $2500 total.
Read more: http://wiki.answers.com/Q/How_much_does_labor_cost_to_build_a_new_car#ixzz20pFSqHqM