Quote:
Originally Posted by GreenTeaFrapp
No they aren't. If Ford suddenly had all it's workers work for free to save the company would the price go down? No, it wouldn't.
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Your logic regarding the automotive industry confuses me.
When a car company launches a product line, they have a target price with which to sell at. If GM or Ford is making a midsize car, they know they need to be competitive with the Camry, Accord, etc.. and know what their pricepoint should be.
If their manufacturing costs are considerably higher than Honda and Toyota (which they are), then something has to take a hit. The profit on the vehicle sold, or the other money put into research/development, design, etc.
As someone who worked at an automotive design firm in Ontario, doing design work for Toyota, Ford, and GM, I can certainly tell you that the money allotted for a Toyota project is greater than corresponding projects for Ford/GM.
If labour costs are higher, the slack needs to be picked up somewhere. If its not, the company does not make money, plain and simple. If money is cut on the development of the car, of course demand is going to decrease, as Joe Public doesn't want to buy a poor quality car when he can get a good quality car in the same price range.