[IamIan]

Originally Posted by Hersbird

Honda themselves is the one who said they were selling the Insight in the US for $20,000 at a loss. It was you who came up with a theory with no proof to the contrary.

I'll try to walk you through this again ... repeating briefly bellow several of the 'key' parts of this concept that were described previously ... not no proof ... not contrary to what Honda themselves have claimed.

All of these are known... nothing new .. nothing unproven.

We can go into each in more detail if you like ... but the end result is the same ... Short version ... I1 retail price $18k-$19k turned a profit vs the Manufacturing cost.

1. Itemize Cost Items:
   1. R&D cost money ... but none of that R&D cost is manufacturing cost.
   2. Advertising cost money .. but none of that Advertising cost is manufacturing cost.
   3. Lobbying cost money .. but none of that Lobbying money is manufacturing cost.
   4. etc...etc.
2. Company doesn't Itemize Publicly:
   1. It is well known the Automoible companies do not list each itemized item cost and income... to tell us the public which ones individually did what for performance.
   2. It is well known the companies roll numerous costs and incomes together and give a single net number.
      1. If they add $100 Million in additional advertising ... but that Advertising only produces $10 Million in additional sales ... they do not publicly say they had a $90 Million advertising loss ... instead they roll it into and take that $90 Million loss out of the profits that came from (sales-manufacturing cost)... etc ... repeat for just about all itemized items
      2. When asked is the I1 was sold at a loss .. this is the industry standard mechanism for rolling costs together... Saying the I1 didn't cover all those other non-manufacturing costs that the company usually rolls in ... has nothing to do with weather it did at least achieve a sale price that paid for the manufacture of the item.
   3. Due to corporate tax structure of being able to 'write off' a loss ... It is in the financial best interest of the company as a whole .. always have some 'loss' leader item in order to maximize total net company profit margins.
      1. 10 Item costs and 10 Item incomes may on the whole for a net company still net profits .. but reporting it that way is a tax disadvantage... it is in the companies best financial interest to pile lots of those costs together to force one item .. or one sector .. to at least on paper be operating at a loss ... that loss can than be deducted .. and thus reduce the tax burden for the whole company.
         • This is common practice for ALL large companies .. It reduces their tax costs by billions.
3. Modern Factories manufacture products at very low cost.
   1. Robotic welders , Robotic painters, Assembly lines, bulk material purchases ,.. etc... reduce the labor needed to manufacture a product (like a car) to tiny amounts.
   2. The factory the I1 was manufactured in was itself already paid for before the I1 .. and that factory was already designed/setup to produce Aluminum Frame/Body model vehicles.