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Originally Posted by Samurai It all depends on the company strategy. For example, HP sells their color inkjet printer below cost, incurring losses. Why? Because the money is in the repeat sales of inkjet cartridges and not in one time sale of printer.
After buying color inkjet printers, most people will start printing color pages and exhaust the cartridge in a month. One pair of cartridge (BW&CO) can cost as much as half the price of a low-end printer. This repeat purchase will ensure steady inflow of revenue.
Therefore, you must understand the earning model adopted by a company. If a company plans to make steady revenue via spare parts and service, they may sell the car at lower profits. Companies with huge market share like Maruti and Hyundai can use this strategy, but not Fiat.  |
I agree with Samurai, You should probably get a copy of "Wheels" by Arthur Hailey to understand what all thought processes go behind the making of a car.
Besides, I've heard that in the US the oil companies in Texas pay a huge sum of amount to the auto manufacturers every year, since their profits depend on the total sale of oil (gas, petrol, diesel, etc) is sold to retail consumers every year.
So for every dollar of gas that you fill in your car, a small percentage of it may actually go to the car manufacturer himself..
Sounds like a conspiracy theory.. Check it out, it is indeed intriguing.. Why else do you think the auto-manufacturers in the US can afford to offer discounts as much as $5000 on pickup trucks and cars??