All this new marketing definitely saved the company, since 01 their market share has gone up 2.6% (from a whole 1% in 01). And i'm not saying the new subarus are crap or anything, just I don't think they're quite as... rugged I guess? I'd rather take a ea81 way out there than a 2015 fb25 with a CVT. But just an opinion

 

Totally agree recent  Subarus have got more flabby (1350-1500kg) less robust more complex more urban compared to the simplicity and nimbleness of pre 1990 Leone / GL manual EA82  D/R wagons (1100kg)  and Brats  (950kg)  4MT D/R + EA 81, bomb proof reliability and are more suitable for going off road.

 

Have owned / own examples of both

Edited March 1, 201610 yr by subnz

 

• The profit margins ARE from selling vehicles.  The markups aren't huge, maybe a few thousand dollars per vehicle, depending on the model, manufacturer, where the vehicle is built and sold.
• The goal is always to make the most reliable vehicle possible.  Your product is your reputation.  Where is Yugo?
• When you bring in your '99 Forester under warranty with blown head gaskets, guess who eats the bill for the parts and labor?  It's not the customer or the repairing dealer, I can tell you that.  Warranty work COSTS us money.  We have to pay for the replacement parts, the tech's labor AND any markup for the dealer.   Not cheap to do, I've presided over recalls that cost the company MILLIONS of dollars, just for one little issue.
• It doesn't cost more to engineer a better product, but there are many factors that you can't see or understand until you work in the industry.  Turnaround times for projects are short.  Engineers are human and make mistakes, overlook the obvious and are known to screw up once in a while.

Unless you really know what you're saying is true, keep the conjecture off the web.  You're just misinforming other folks who don't know any better.

 

 

I think most of the current info suggests gross profits (not revenue) usually surprise most people and has shifted greatly over the decades into service/parts, also surprising people, regardless of how we define "most, more, a lot, etc":

http://www.forbes.com/sites/jimhenry/2012/02/29/the-surprising-ways-car-dealers-make-the-most-money-off-of-you/2/#41211e9e3ec5

http://www.edmunds.com/car-buying/where-does-the-car-dealer-make-money.html

 

I think reliability is a goal but "the most reliabile vehicle possible" doesn't stand alone in a vacuum, which I think you basically say by suggesting the short turn around times. In particular - american consumers don't give vehicles much shelf life.  "reliability" is not directly, but incidentally weathered by the constant consumer need for new, change, novelty, warranty, stellar service, etc.  That's why Subaru can't just re-instate the EJ22...gotta compete, try new things, be bold, etc.  If money flowed directly towards reliability things would change.  Marketing teams will say things like, "The best consumer is an unhappy one" - they have anecdotes, psychological studies paradox of choice and on and on and on which drive their teams to create products and a perception that "new is necessary". 

 

Seems to me the stagnation of reliabilty is largely a symptom of American consumers driving that market.  

 

And while that doesn't provide what I'd prefer in the current offerings of vehicles - it does make for advantages in other ways.  

Grossgary, the view from the outside is always going to be different from those on the inside.

 

I can only speak to how my company operates.  Granted, we aren't building vehicles for John Doe and Sally Sanchez, our vehicles are expected to have a 1 million mile service life, so perhaps our reliability goals are on the far end of the spectrum.

 

That said, I think you would be surprised how quickly one or two major flaws in a vehicle's overall design can erode any profitability, sometimes for several years.

 

I will reiterate my main point:  Every manufacturer who sells a product in North America is trying to build the best product they can based on thousands of constraints.

 

Yes, companies are making more money from parts (not so much service, but parts for sure) is because many manufacturers have a house brand for parts.

 

If you ever make it out to the West Coast, drop me a line.  I can talk about this stuff all day, soooooo much different when you're on the inside looking out.

while not transportation-related, I have always worked in manufacturing and there's always trade-offs. But getting and keeping customers is usually the bottom line. Unless you're lucky to be in some kind of g'mint protected monopoly - you will have a lot of price-pressure from your competition such that, they sorta set your prices. So, your net profit comes most often from internal savings; Trying to save on materials and production labor, save on returns/repairs, save on legal, save on taxes, save on advertising, save on engineering and testing,  save on capital expenditures, etc.

 

folks who never had to please a customer or make payroll often don't fully understand the constraints placed on a business by market forces.

 

  I also think about that when some politician wants my vote.

Edited March 2, 201610 yr by 1 Lucky Texan