If tariffs are raising prices, and that's driving away customers, isn't the solution to LOWER prices to "cancel" the price hike?
Very overly simplistic, though.
And not sure what car company profit margins are, but I know some companies run on very tiny ones. If tariffs drive your costs up, and you lower prices...it's impossible to profit.
Also, for a niche market like Porsche especially, making your luxury car a couple thousand dollars cheaper aren't going to attract new customers. And you might still be losing money even if you did, if combined operating costs are higher than sale prices.
The main scenario where lowering prices raises your profits is when you're in a tight and competitive market. Luxury cars, I'm guessing, aren't that; it's a small market to begin with, and lots of people already have their chosen brand...they might not want a Mercedes, if they can get a Porsche, or vice versa. The point over lowering prices is to outcompete, and to expand your customer base. I don't see either of those things happening to a significant degree in this scenario.
As someone else said, the answer is to dodge tariffs completely by opening a US plant.
If tariffs are raising prices, and that's driving away customers, isn't the solution to LOWER prices to "cancel" the price hike?
That way prices stay the same, at the cost of lower profit margins, but business stays steady. Right?
Very overly simplistic, though.
And not sure what car company profit margins are, but I know some companies run on very tiny ones. If tariffs drive your costs up, and you lower prices...it's impossible to profit.
Also, for a niche market like Porsche especially, making your luxury car a couple thousand dollars cheaper aren't going to attract new customers. And you might still be losing money even if you did, if combined operating costs are higher than sale prices.
The main scenario where lowering prices raises your profits is when you're in a tight and competitive market. Luxury cars, I'm guessing, aren't that; it's a small market to begin with, and lots of people already have their chosen brand...they might not want a Mercedes, if they can get a Porsche, or vice versa. The point over lowering prices is to outcompete, and to expand your customer base. I don't see either of those things happening to a significant degree in this scenario.
As someone else said, the answer is to dodge tariffs completely by opening a US plant.