Wednesday, February 06, 2019
Not as simple but still bad
Evocative question from Tesla skeptic 'Peoples Grain'.
Does any other "luxury" car brand make such an effort to market their cars as inexpensive? If you're a premium car, be a premium car, don't apologize for the price every third day. Earn the price.
It's not as simple as he thinks, but the more complex answer is still negative for Tesla.
I can think of four examples motivated by the 1930s Depression.
Marmon tried a low-priced car named Roosevelt (Teddy, not Franklin). Failed, and the company failed.
Stutz tried the Blackhawk. Failed, and the company failed.
Lincoln introduced the Zephyr in 1936. TREMENDOUS success. Sales multiplied from 1500 to 16000, more than 10 times.
Packard introduced the 120 in 1936. TREMENDOUS success. Sales multiplied from 10000 to 110000, more than 10 times.
What's the key? Lincoln and Packard had a solid reputation for quality and a LONG history with SOLID capital resources in money and factories and skills. Marmon and Stutz were already near bankruptcy BEFORE they introduced their 'juniors', and the low-profit addition killed them.
Which side of this equation does Tesla occupy? Easy answer.
(You could argue that Cadillac tried the same thing with the LaSalle, but it's not the same jump. The LaSalle was still in the luxury price range. It was a moderate success but didn't really hurt or help the brand.)
Labels: Constants and Variables
¶ 7:10 AM
