At one time, General Motors limited Corvette production to 50,000 units per year, even if demand exceeded that number significantly.
The chief reason was that the very expensive molds (and perhaps other tooling) used in body production had a useful life of about 50,000 bodies. The cost to build the body production line anew was very large - selling another 5,000 or 10,000 units would be a drag on profits.
The result: the Corvette demand was fueled by the scarcity of supply and prices remained high. So did profits. And the Corvette's cachet was enhanced.
Honda in the US was in the same position quite some years ago - vehicles were selling at more than the sticker price as retailers added add'l dealer services or accessories at inflated prices.
Nothing new here. Managing supply, demand, customer perception, fixed and variable production costs, etc. is a complex task. There are no easy answers, particularly as each case will differ somewhat from the last.
So far I've seen only one or two members posting in this thread who seem to get that. Most are better photographers than business analysts. Me? I'm pretty poor at both. That's why I don't claim to have the answers .....
Last edited by glanglois; 07-22-2013 at 09:26 PM.
Reason: Syntax - I failed to pay it.