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Catering to used car buyers-parts
I think it important to remember that any car manufacturer has the
advantage in producing OEM parts. They have already paid to gear up for
production. To stock their used parts line, all they have to do is run
their manufacturing line at the time of original production for so many
extra months and warehouse the extra inventory. Even if they stock
parts by restarting production lines now and then (which I doubt), they
still have all the tooling and don't have to start from scratch. This
applies to their "out-sourcing" suppliers too. So when after market
producers can beat Audi's price by 1/2 to 1/10, you know Audi is making
a hell of a profit on their parts.
I have no qualm with Doyt's analysis of dealer profits--my beef is with
Audi's huge profit margins in wholesale prices before they arrive at the
dealers--that's where the reduction an price has to come.
Our major problem in dealing with Audi and VW is that the entire
industry may be playing the same game--including the Japanese--cutting
new car prices down to the point where they have to make a good portion
of their profits on parts--from us used car buyers. So if any company,
like Audi, decides to help us out, they might be faced with having to
make more money off of new car sales, which would make them less
competitive. In fact, I think there is enough sloppy profit in auto
manufacture's incomes that they could be less aggressive in parts prices
and still make a profit--without jacking up the new car price--but I'm
sure Audi would never admit to this. It would be great if some Audi
stockholder could get some inside data on where the profit margins are
coming from--parts vs. other sectors. Anybody out there that could
help?
Best, Joel