Quote:
Originally Posted by duncan
Niky
You are still missing the point
It really does not matter what a car can be "made for" the price is determined by what it can be sold for
There is no linkage between the two
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Of course there is.
If the margins between sales price and cost price are too thin and volumes are low, the car simply won't be made.
If the manufacturer can expect reasonably large volumes, even with low margins, the car will be made.
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And then the dealerships will simply jack up the transaction price beyond all belief by loading those cheap cars down with expensive options.
Still, to convince people to pay more, you have to add more to a cheap car. Not less. Same goes with Keis... for higher profit margins, you have to load them down with $2k - $4k of options. The higher the price, the higher the percentage of the price that goes to profits.
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Of course, there are the cars that never turn a profits but are still produced, simply to offset the losses. Like the Audi A2, the Smart ForTwo or the Phaeton...
Ironically... the ForTwo is, IMHO, too expensive for what it is, and it's still a $6.5k loss on every car.
Europe’s biggest loss-making cars revealed
I wonder, actually, what the balance sheet on the Nano is. It is creating huge losses for Tata, but I don't know of anyone who's done the breakdown to see what they're losing per car. I imagine it to be somewhere in the $2k - $4k range...