Absolutely correct. Unless minor styling differences made the vibe
'ugly' for a buyer, one who was educated would buy the Pontiac over the
however, Mike, do you also see how this is the problem (or at least 1
part of the problem) GM has? 2 cars, built on the same line with the
same quality. GM charges (say) $2k less than Toyota.
now, Toyota's responsibility is to maximize shareholder value. So is
the problem is that GM's reputation from the past 20-30 years has eroded
it's name-brand. Therefore, they CAN NOT charge the same as toyota,
because of people's opinions of them (poor quality, whatever).
So, GM might make a couple-hundred off each vibe, but for the same per-
unit cost Toyota is making an extra $1.5k! Money Toyota can pump back
into engines, structures, and research.
It's a shame, but it's a fact of GM's life. Higher union costs, higher
legacy costs, and a lower opinion in the marketplace leads to slimmer
or, 10+ billion in losses.
Actually a lot of the drive home price difference is at the dealership.
Although GM generally offers better incentives and interest rates, it is the
attitude of the dealers that accounts for much of the price advantage of the
Toyotas dealers, like many of the Toyota owners, have the idea we are
better. Toyota dealers in general allow lower trade prices and have a
tendency to add lots of smoke and mirrors to the price of their cars because
they know their customers are the type that will think they are getting
something of value.
When I was still in retail we always were able to package up our import
brand much higher than we could in our domestic stores. We also were able
to get import buyers to take less on the trades. Even our shop rates were
higher in our import shops. The irony is many import buyer think they are
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