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> few are actually loss leaders Nothing could be further from the truth. Brands such as Lexus, BMW, and Mercedes are extremely profitable, because they offer c
by coliveira 10y ago
> few are actually loss leaders
Nothing could be further from the truth. Brands such as Lexus, BMW, and Mercedes are extremely profitable, because they offer cars that cost just a little bit more than a "normal" car and charge up to 30K or more for that privilege. The only constraint on the growth of these car makers is that there are not enough people who want (or afford) to pay that price just for the extras.
- qaq 10y agoThat was about boutique brands Lexus, BMW, and Mercedes are not boutique brands are they? Bugatti is not profitable niether are majority of other boutique brands owned by major automakers.
- cstejerean 10y agoThese aren't the few that are loss leaders. But also a BMW 3 series costs less than my minivan, so I would hardly call that a luxury vehicle. Of course you can get a high end BMW, but somehow I doubt they would be very profitable without the lower end of the market. And that's the point for Tesla as well. By introducing a car that starts around the same price as a 3 series BMW, and selling in similarly high volumes, they can also be extremely profitable.