Re: Is Bombardier, Johnson, Evinrude going to make it.
It's not "Business 101" djohns. It's "Economics 101"....supply and demand.<br /><br />As I said, a lack of demand will cause the price to drop. As long as consumers have a strong demand for a product the manufacturers will take advantage of that demand and charge a higher price. When consumers become unwilling to pay the higher price, the demand for the product decreases, and in return the price usually drops.<br /><br />A good example of this is Bombardier's attempt at increasing demand for their outboards by offering big factory rebates and long warranties. Or Honda and Yamaha's arrogant pricing of the big 225 4-strokes....that consumers continue to be willing to pay for because they want one.<br /><br />I mean come on....when everybody wants some product really bad, you don't see that product sold at bargain discount prices. And when everybody doesn't want a product really bad, you don't see it rise in price.<br /><br />Furthermore, when products are in high demand, the supply is limited. And when products are in low demand there is generally a surplus of product. Products in limited supply generally cost more. Products in surplus supply generally cost less (go on sale).<br /><br />Ask yourself why you don't see 25 Dodge Viper's on every Dodge dealer's lot? And when you do see one it is very expensive?<br /><br />The object for the manufacturer is to find a balance between supply, demand, and price. It's called marketing. Pricing is only one part of the marketing equation, where all parts must apply.<br /><br />It looks like you agree with me djohns that manufacturers are in business to make as much money or "PROFIT" as they can. But without a demand for their product they can't sell enough to make a profit. And if they produce (supply) more than they sell they also can't make a profit. If they supply lots of a product because the demand is high, but don't charge enough for that product, the profits are too low as well.<br /><br />Djohns, your 0% financing is a unique example of how the manufacturers manipulate supply and demand. Consumers have slowed their demand for auto purchases. And the supply of them has increased. So the manufacturers need to sell more. But how do they do that without causing big profit losses? <br /><br />Here's how. Auto makers don't lower the price of their product (in fact it continues to increase). But what they do lower is the cost of the consumer to obtain money to purchase that auto. This works since most Americans finance their auto purchase through a bank. Did they pay less for the auto? No. Is their payment less? Sure. Buyers that pay cash will see no benefit to the 0% interest gigs. As you can see auto makers can manipulate the market, and what they charge for their product, by taking advantage of the fact that most consumers finance their purchase.<br /><br />Consumers haven't completely taken their eye off of the the actual price! The "acutal price" the consumer pays includes the interest. The auto makers have found a way to lower the price for the consumer without lowering the price of their actual product. Really, the banks lose out because they lost the customer that usually finances.<br /><br />Economics.
