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It doesn’t require any conspiratorial thinking. If the math says that the company will lose sales to higher-margin products by offering low-margin ones, it’s a
by ninth_ant 4y ago
It doesn’t require any conspiratorial thinking. If the math says that the company will lose sales to higher-margin products by offering low-margin ones, it’s a simple calculation to make the most profitable choice.
Of course, potential consumers could switch to a cheaper product from another manufacturer — in a sufficiently free market the unfulfilled demand for the low-margin option should be enough warrant a new entrant if the market is big enough.
TLDR if enough people wanted a simple car, someone would make it even if the existing companies don’t want to.
- aae42 4y agoLike an old thinkpad
- Sevii 4y agoThey already manufacture he toyota hilux at scale yet you can't buy it in America.
- notahacker 4y agoSounds like that underlines the OP's point. Toyota makes more profit in the US on a Tacoma designed for US tastes and price points. The US demand for Hiluxes isn't enough to either persuade Toyota to add it to their US line or importers to pay the import tariff.
- rhino369 4y agoI'm not sure where I read it, but Toyota apparently saves money in the USA by making optional features included in the base model. In the 90's and early 00's, US companies would churn out base models with crank windows, manual transmissions, etc. Toyota found it was cheaper to engineer/build cars with fewer options, especially one's that everyone chose anyway. And customers didn't feel nickle and dimed. That makes sense to me. That's part of why the Model T was so cheap.
- dsfyu404ed 4y ago>Toyota found it was cheaper to engineer/build cars with fewer options, especially one's that everyone chose anyway It's easy when you're Toyota and the overwhelming majority of your customers are middle class on up consumers. When you're Nissan or Chrysler and you NEED to offer low MSRP stuff so your customers can just barely qualify for the loan or you're Ford and you NEED to offer base spec stuff for the fleet customers it's not so easy.