Suffering from falling car sales? Put up the price then!

[Gazza77]

http://news.bbc.co.uk/1/hi/business/7866884.stm

Is this really a good marketing move, irrespective of the fact that most people will pay nothing like list price for a new car?

not much of a surprise really, pound is worth less so of course imported goods are gonna be more expensive.

Most manufacturers have put their prices up in the last ouple of months or are looking to! Certain Geran companies also increased the prices the day the VAT dropped so people wouldn't see it - thankfully I'm out the fleet trade as of last week - back to bike sales for me which hasn't been hit by credit crunch so much regarding sales in the UK

It's alright so long as they use this price increase and potential government loans to support the companies that supply into them. If it's just used to maintain their margins it is ridiculous and short sighted.

[Gazza77]

Originally Posted by Scoobs

It's alright so long as they use this price increase and potential government loans to support the companies that supply into them. If it's just used to maintain their margins it is ridiculous and short sighted.

Doesn't really matter either way, they won't be selling many will they!?

If you use an example of the difference in price being the difference between a per-unit loss and a per-unit profit, it might make more sense?

E.g. keeping the same price, they will make a loss of £50 on every unit they sell, increasing the price they will make a £150 profit on every unit they sell.

So if they then reduce their production capacity by laying off/closing factories/etc, they may end up as a smaller, but profitable company. If they continue to make losses on every unit they will end up unprofitable, whether they resize or not.

This ignores factors such as fixed overheads and bulk cost savings, of course. But I would think it easier to then reduce your fixed overheads on the smaller company as a lot would be related to (now) unused capacity, etc.

I'm sure it's a lot more complicated but I could see the above being a reason.

[Biker Biggles]

If Honda have got 10000 unsold cars sitting at Southampton I reckon Ford and GM can up/down/re-size all they like,but they still wont be selling cars at todays prices or tomorrows.They may as well shut the factories now and save their money.

I bety you anything, if you bought a car today it would be one of the hundred of thousands sat on runways, all manufactured and imported at the old prices...

Its a cheeky fecking way of keeping there margins up..