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Discussion in 'Rumors and Speculation' started by Dave Z, Sep 13, 2017.
Exactly why you make a Chrysler version rather than diluting the Wrangler.
Actually I like the idea of a wrap. Take for example if I owned my wrapped car for a couple of years and I would like to change it up. I could go down to the dealer and have a new color wrap installed. It would be like having a new car without the huge expense of a complete repaint job, or purchase of a new car.
Yes. Someone apparently has confused hedging with gambling.
The best business strategy is one that seeks to maximize both margins AND volume at the same time. Because doing so maximizes revenue and allows costs to be spread across more units, which in turn optimizes profits.
From an economic standpoint: as price goes up, volume goes down. However, all businesses have the option of moving to a higher demand curve where they can operate at both higher prices and higher volumes, resulting in higher profits. One of the well-documented ways to shift to a higher demand curve is through stronger branding. This is the strategy Toyota and Honda followed from the 1970s through late 1990s, and Subaru has been using in the US since the Great Recession —Subaru has been growing sales without discounting or using incentives, just like Toyota and Honda did years before.
By obsessing constantly on choosing between a finite production capacity (i.e., volume) OR margins (i.e., price), FCA is stuck on a false premise that ignores the fact that it could operate on a higher demand curve. And by ignoring the importance of quality, and purposely crafting a collection of non-overlapping, constrained brands, FCA is giving up on the opportunity to leverage branding as a means to shift to a higher demand curve, making its limited choices self-fulfilling.
Aldo, I think in a way we agree, and your comments support my fanatasy line-up. Using Redrider Bob's post about flexible architecture as a guideline, there is a lot of overlap under the skin with the other divisions providing economy of scale for manufacturing, but enough differences so that it is not just badge engineering or me too products.
So in your line of thought, let's do away with 3/4's of a worldwide company....that sounds like a coherent business strategy
And the problem is “renovations” put you further behind the tech and safety leaders. So you sell on discounts - and lose any advantage you had in those areas to save a few development dollars. And “save” isn’t really the right word. “Delay” is. Because once you do update you have to convince all the people used to discounts to buy the new product. It’s the Grand Caravan/Pacifica delimma repeated again and again. Sergio can’t keep product fresh. Too many brands or too few dollars - which is it? And now there’s supposedly all these new products coming by 2022? From the company spending a minimum amount on development the past years?
Indeed. But that strategy remains focused on maximizing margins within existing capacity utilization, and continues to ignore the power of the brands in helping to grow volume beyond existing capacity, and to grow sales without using discounts.
Very true, indeed.
At the same time, growth opportunity should not determined by your existing production capacity.
Just as easy as thinking there’s nothing worth knowing outside your cubicle’s partitions, because it doesn’t fit existing preconceptions.
Unfortunately, without knowing their financial constraints, it's very hard to make an accurate judgment on that (growth opportunity)
If you sit at your computer and make pronouncements, you should keep an open mind to other pov. Just saying.
lol, ok. So you'd propose spending the money to heavily modify a Wrangler instead of simply using the existing crossover platforms. That's a... er, bold strategy.
Ah...but does it? If my Chrysler "Town & Country" (aka Wrangler in disguise LOL) is successful it will certainly help grow volume beyond the existing capacity. And, if it is like the Wrangler, it won't need to be discounted to grow sales. See, we are thinking along the same lines although admittedly, the CMX would be more of a Halo car.
New products are exactly that, new products. They sell on their own merit and desirability and aren't tied to any current discounts or promotions. If you let that happen, then, that's on you. As I said the advantage of renovations done now, as opposed to the future or piecemeal is cost. After all the future is at best a "best" guess. If you "guess" correctly now you can ensure years of productivity and growth, all things being equal. As for putting you behind on tech and safety, that is where you have updates that keep on being made regardless of renovation status.
Yes, go big or go home. It could be a make or break product for the Chrysler brand.
Well it would certainly break Chrysler in my opinion. Thankfully it would never be considered.
Yes, I had a professor in graduate school who had a favorite saying. Goes something like this: "No matter how thin you slice it, it's still bologna". Call it "hedging" if you like, or whatever you will, it still boils down to "gambling". The element of chance is not gone, it's still there. So, it still is a "gamble", even though you are gaming the system to your advantage (hopefully).
FCA volumes are declining. The plant upgrades will mean little if volumes drop to a point where they annot be sustained
I just keep things simple man. Innovate on what you have and what people want. Don't try and get fancy with it. Spending millions on marketing to make a splash is risky. But idk if it works out by creating all new vehicles and expanding your empire then why change?
I'm waiting for the rebirth of the Magnum with a tow package.