Quote:
Originally Posted by Arragonis
But if you do that, and the wind changes (e.g. fuel prices fall, maybe temporarily for example) then you get stuck with eco inventory whilst everyone is off buying SUVs again.
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Not necessarily, because you've figured out what your base market is, and you build and sell to that. If demand jumps temporarily (due to an oil price spike), you don't suddenly ramp up production, you raise the price :-)
And of course this doesn't apply just to eco cars: there are smaller brands who find a niche, and have done quite well by sticking to it. (And sometimes flopped when trying to move out of the niche.) Subaru comes to mind, and Lotus.