Of course there are those who would question this logic of producing less. What about market share? Porsche and Subaru have grown their market share more than most other brands despite having lower inventory levels. What about the need for domestic dealers to stock lots of pickups because of thousands of configurations? Domestic store profits have grown lately even with fewer versions of trucks to sell since their profits per truck are far higher than before. Scarcity creates value.
There also is ample evidence that overproduction leads to undesirable outcomes for dealers and automakers. Nissan and Infiniti are the best recent examples of this mistake. Nissan Motor Corp.’s former leadership pushed too many vehicles into the market, causing billions in losses for the automaker and significant erosion of franchise value for dealers.
Plus, millions of people who bought Nissans have suffered from weak residual values, costing consumers billions in lost value. Overabundance erodes…
Source news autonews.com, click here to read the full news.
