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Old 26-12-2008, 10:13 PM   #24
phoon
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Join Date: Sep 2005
Location: half way between here and retirement
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Lose money on the car sales for a short period, but hike up the genuine spare part costs, thats how they stay in profit in bad times. I used to work for an ill fated parts manufacturer in the 80's. We supplied Ford, Holden, Toyota, Mazda and Mitsubishi. OEM parts we manufactured were of the highest quality standards and the parts that would be rejected for OEM went to spare parts. The price hike for these was an average of 250% higher than the best quality parts that went on new cars. Or for example, some of the deals were like this with car manufacturers, make door handles for the magnas for a loss of $10 per handle and mark up the wheel covers for spare parts by $250% which recovered your loss on handles and gave a healthy profit at the same time on wheel covers. This made sense as a supplier as it helped the car manufacturers keep the new car prices down and not many door handles were sold as spares (minimizing losses on these items) and make your money on the wheel covers as spares because these used to sell by the thousands as spares (seems there are allot of people that cant park without scraping the gutters. Good for us, good for the car companies, bad for consumers that needed spare parts.
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