Quote:
Originally Posted by Berean
Note to Angel: The following is not directed at you personally, so no need to get defensive. Just quoting you as an example of this type argument.
I've heard this argument many times on this board, and I just don't get it.
The MORE options a customer has in a class of car from the same manufacturer, the better. As long as you're "poaching" sales from yourself, there's no problem.
If the logic is that you can poach sales from yourself holds, then having different models within a class must also be bad.
You could just as easily say the SS poaches sales from the V6. It does. But who cares, GM gets a sale regardless.
If the SS wasn't an option, many SS owners would still have bought a V6. But some wouldn't have and GM would lose some sales without an SS option.
Since GM ditched the Pontiac brand and they won't be offering a Firebird, I guarantee they have lost sales as a result. Not everyone who wanted a Firebird will buy a Camaro in it's place. Less options in the same class equals less sales.
Another case in point. GM sells the exact same truck along side each other branded as GMC and Chevy. They don't care which one you choose as long as you choose one. Eliminate one of the choices and GM will lose sales. Someone who wanted a GMC truck may look at the Chevy, but he also may look at the Ford. Now his choice is between a Chevy and Ford, not a Chevy and GMC.
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Not quite true. It only works if you can maintain volumes. For example, each car has an invetment in tools, parts, engineering and development, to name but a few. The business case to get your return on that investment is based on a projected annual sales rate. If you bring out another car in the same class that competes with the other and impacts the volumes, you will be less profitable or not profitable at all.
The truck example is unique simply because the investment for the diffrentiated parts is much smaller than doing an all new. The Chevrolet and GMCs share the same cab, the frame and chassis and a lot of the interior. And the volumes are so high that you can make money. I think the Sierra has higher annual volumes than the Camaro.
What you are thinking of is simply "plus sales". So if you could come out with a Chevelle coupe and not steal any Camaro sales, you would be ok. Take 10,000 sales from the Camaro, though, and you have significantly changed it's profitability.