: Good sales vs bad?



N0DIH
09-20-11, 05:32 PM
Found this quote on Wikipedia (yeah, I know, what is the source....)

"Lexus promoted the arrival of the second generation GS sedan with the tagline, "Something Wicked This Way Comes (http://en.wikipedia.org/wiki/Something_wicked_this_way_comes_%28phrase%29)." Compared to its predecessor, the second generation GS sedan was a much bigger success, with sales reaching 30,622 vehicles in its first year, increasing in the second, and stabilizing at 28,079 vehicles by 2000.[1] (http://en.wikipedia.org/wiki/Lexus_GS#cite_note-relentless-0) The U.S. base price for the GS 300 and GS 430 averaged approximately $38,000 and $47,000 respectively. The success of the GS sedan prompted Lexus to keep the vehicle in its lineup for eight years."

Cadillac sales from 1993-1996 were around 25k a year and Cadillac dropped the car for it. Lexus was HAPPY with the sales just a hair over that and prompted keeping the car alive and continued it along. GM, what are you thinking? 25K a year on the Fleetwood with probably a 70% profit margin for it. They are simply turning away business! Those are paying customers they turned away. The people who bought those last 4 years of Fleetwoods did NOT buy the similar looking FWD Deville. They bought the Fleetwood because that is what they wanted. So lets see at a paltry 50% profits (they HAD to make more than that on these cars), $20k profit a year X 25000 sales a year (approx sales per year on the FW in the last 4 years) that ends up around $500,000,000 PROFIT. Am I missing something here? Did the trucks make THAT much more money for GM, enough to kill off the line and retool the Arlington Plant to trucks? It wouldn't have hurt much to improve the Fleetwood or to at LEAST keep it around. The Roadmaster owners would have likely bought a FW if the RM died off. Even if my math is 50% off and they made 25% profits, $250M still shows up on the P&L statement....

http://en.wikipedia.org/wiki/Lexus_GS

jayoldschool
09-20-11, 08:52 PM
Yes, the trucks made that much more profit. GM was making 1-2K on the cars, and 7-10K on the trucks. Car manufacturers don't make anywhere near 50% profits.

N0DIH
09-20-11, 09:16 PM
I just can't see a 30 year old chassis design with a small block in it with some leather inside an expensive car to build. I guess UAW takes a ton out of the profits eh?

brougham
09-21-11, 02:23 AM
By the end Fleetwood sales were down to something like 15,000 a year and it needed a redesign again. It probably came down to why waste assembly line space for that when they needed it to build something that sells better. Some Road Master buyers might have got a Fleetwood but more would have either got another kind of car or something used. If they wanted a Cadillac and been able to afford one they would have bought it to begin with.