Re: Lexus, et al

[ScharfR@aol.com]

In a message dated 96-04-18 08:19:35 EDT, Quattrofan@aol.com writes about the
reasons for the Japanese mainstream brands to establish luxury import
franchises.

>Due to import limitations, the feds wouldn't let them sell over their quotas
>unless they created seperate dealer networks with the franchises in their
own
>showrooms. 

Actually, the creation of separate luxury franchises did not enable the
Japanese brands to bring in more cars.  Instead, it made it possible to bring
in the same number of cars at a much higher per unit profit. The desire for
profits would have been limited by the public's unwillingness to pay large
money for luxury cars with pedestrian brands. So the Big 3 Japanese launched
new luxury brands to break into the big money club dominated, up to that
time, by the Europeans.

The basic quotas scarcely changed, but transplant production of some of the
higher volume models made room within the quota for the high dollar stuff.
The quotas never applied to the transplant cars.

You could make the case that the quotas created an artificial shortage of
Japanese cars, driving up prices/profits. These  extraordinary profits were
reinvested in transplant production and new luxury franchises. Thus the
quotas, which ostensibly protected the domestic manufacturers, provided an
artificial basis for extraordinary profitability for the Japanese. Proves
that it's really hard to predict the outcome when you tinker with the market.

> Anyway, Mazda was all set to join the foray too, but smartly waited for the
initial dust to clear.

Mazda wasn't smart, they were broke. Lack of money and diminishing sales of
the remainder of the Mazda line forced them to bail out of the Amati
franchise just before launch. That gave the world the Mazda Millenia (instead
of the Amati it was designed to be). It is quite reasonable to expect that
launching Amati would have brought Mazda to its knees (where they currently
find themselves) even sooner. Now Ford has a controlling interest and you can
probably kiss rotary engines and Mazda-style innovation goodby.

> I think what hurts them is a) having the VW logo stamped on every part of
the car for all to see

Take a look at a current Audi. They have done a good job of hiding or
shedding the VW logo.