no, no, no


its not that supply should=demand its that for pareto optimality to be met.

the price should be set where the demand forthe good at a certain price is met by the supply at that price.

So in actuality, based on the number of ppl paying OVER sticker NISSAN is GIVING the cars away (and the g35 too)

In some ways this could be seen as "dumping" (if they cost more in the domestic [jdm] market). In actuality NISSAN is simply "buying its way into the market. Almost a "were" sorry and "thanks for sticking with us" to its fans.

Heya Mr. Exclusivisity?

how many M3 do you think are made every year? How many 3 series? Is BMW making money? Whats BMWs reputation and mindshare?

Do you think NISSAN would like BMWs stats?

Imagine 30K Z a year and 1K Z TTs...feel better?

 

Agree. Actually, the sales rap. told me that "the Z are to get ppl to come into the showroom. And the Altima/Pathfinder/etc. are what they'll get"

It's very common for car makers to sell their car a little below their cost in order to made the "biggest bang for the buck" effect for their brand.

As far as i know in jap's domestic market, Mit. aren't making a lot of $$$ with they evo, neither is Honda with its NSX, or subaru's WRX Sti edition....

 

You are looking at the 350z from the wrong angle.

I don't know if you own one or not. But I think you are considering this to be a luxury product.

Ferrari = luxury sports car product. 350z = general mass low end sports car prodcut. These two have different lvl of production, different demand and supply characterisitcs.

 

<<Actually... I know economic theory... I don't think Nissan's main goal with the Z is not to make money but rather to increase brand awareness. They can do this without producing 30 thousand. With their current advertising scheme and even 15,000 on the road they can do it...Right now there are too many cars lying around, at local dealerships there are between 5-20 vehicles that aren't sold and are being offered @ MSRP. I believe that Nissan could've built less because the demand isn't as high anyways. Therefore... Supply does not equal demand right now. Also, because the elasticity is pretty high for sports cars, they can charge MSRP for longer if they lower supply below the demand.>>

So. 1. You're guessing that Nissan's main goal is to increase brand awareness instead of maximizing profit.

2. You're assuming that because you've visited a few dealerships the car is not selling.

3. Based on your assumptions, you conclude that supply does not equal demand "right now".

Nice, but try again. At least you know what elasticity is; however you need to learn how it all really works.

There is a reason Nissan is producing 30,000 units. The reason is they believe that that production run will amount to the greatest profit margin (given projected demand). Business is business folks.

By your logic, what Nissan should have done is produce 3 Zs and charge 3 billion for each.

 

The theory of business is to maximize stakeholder wealth. One can never truly know if profit is maximized.

 

Yes, I agree that they are projecting 30,000 units will yield the most profit, however what I'm disagreeing with is that 30,000 is too high. I have called 10 local dealerships within 50 miles of Los Angeles and most have between 4-20 cars sitting on their lots that have not been sold and are @ MSRP or +1000 negotiable. I have asked how long they have had their cars and most have replied that they have been sitting on the lots for at least 2-3 weeks. Therefore I am concluding, through my informal survey that supply does not equal demand right now.

 

 

Anyways... what it all comes down to is this. I don't have my Z yet; so Nissan should not lower production runs. When I get my Z they can stop production completely. =)

 

Did you want a specific model?? Universal city and Glendale Nissan dealerships, along w/ Nissan of El Monte and Performance Nissan, and Gardena Nissan are all selling Z's @ MSRP... Some will say they have markup, but I started talking to them @ the dealership and they said realistically they'll sell @ MSRP.

 

Dude, call Nissan of Long Beach - they haven't had a Z stay on the lot longer than mine - which was only 6 days cause my car came earlier than they expected. Every other one that they get they are fully loading, and they are selling like crazy. Not a single one on their lots unsold for more than a couple days.

Also, lets not forget, MSRP is what Nissan wants to sell these for. Quite frankly, they don't want dealerships slapping additional markups on the product, only makes a more frustrating experience for customers.

In terms of why Nissan's doing what they're doing? I think a lot of it is because a Z means they have a sports car available, and perhaps you'll watch the Z racing around Laguna Seca or on Speedvision. This is a brand marque car, this is Nissan - the company that survived the 70's on the Z (aka, most popular sports car in the world, ever). I also agree, an extra $5000 more, and I wouldn't be able to have mine. 30,000 units a year is nothing compared to their main products - Altima, Maxima, Pathfinder, Frontier, Sentra. Those cars they can move 100's of 1000's of units, whereas there will probably never be more than 150,000 Z's in the country before they revise the model. (30k * 5 years (avg. model life in America))...

So if there are 150,000 people in America that would like a 350Z, sometime within the next few years, that's all Nissan wants. With a 2 seater sports car, basic economics is fairly useless, because a lot of the price is to recover costs, Nissan only makes like $2500 per Z sold at MSRP, meaning at most they earn $75 mil, not a whole lot for a car company, and lets not forget they have to warranty the car for 3 years, probably costing them $10 or $20 mil a year (just a total outta-my-*** guess, pls don't hold me to that). . . For a car company, they'd rather get 100,000 Altima's sold at $2000(profit)/car = $200 mil.

Nissan, sell like crazy. Then I'll have an excuse to get a body kit...

Sorry for the length y'all, just had to drop my $0.02... Have a great one!

 

30 thousand a year is a lot. That's like the amount of corvettes sold a year.

 

While demand there it's worth it. =) It makes sense that if the market shows a strong want for the Z then the company can use that generated capital to bring over the GTR.... which will be much more exclusive and around the price of now dead Z32. Bada Bing, Bada Boom and Nissan has attacked all four areas of the sports car market.

Nissan 350Z for inexpensive sports car
Nissan 350Z conv for the open air / roadster type
Infiniti G35C for the luxo-sports coupe / 2+2
Infiniti GTR for the *super*car

 

what you guys are forgetting in all your economic theory is the cost of production. We don't know how much it costs Nissan to produce their cars at various quantities. Maximizing the profit takes place where their marginal cost per unit equal the marginal revenue they recieve for each car. As far as the quantitied supply being too much goes, I'm sure Nissan will scale off production once all the hype wears off (when they start sitting on lots).

 

Whats wrong with making that much Zs a year? the more they make, the more people get to own one and enjoy the hell out of it. If you want a Z, but still want it to be "rare"....PAINT IT PINK!!

 

Unsold Z's at dealer's lots in CA only tells me that those dealers have a larger allocation than anywhere else. I checked Nissan's inventory for any Z's in DFW and there aren't any. Mind you, 2 dealers in DFW were 2 of the top-ten Z stores in the US.

The Z is Nissan's halo car. However, Nissan can not afford to not make money w/ it. Honda/Acura can w/ the NSX and S2000, but Nissan can not. Carlos Ghosn even made it clear to the Z product planners.

Michael.

 

Hope that GTR comes around soon... Definately plan on pickin one up.

 

Ford built 400,000 Focus cars, now that's a lot. I still have yet to see another Z driving down the road. Not everyone is going to get a 2 seat car. I expect you will see a lot more Infinity G35Cs out there than Zs.

 

I dunno about that... There are only 12-15 thousand G35C's to be built, and 30 thousand Z's. My thinking is probably the same number will be on the road when the Z hype goes down.

 

<<Hope that GTR comes around soon... Definately plan on pickin one up.>>

Nice. Sell me your Z then . I can barely afford a Z, but the GTR looks like its gonna be niiiiiiice.

I was always taught by my dad to NEVER purchase the first year run of any mass production car.... so, I'm waiting till the '04s are out.

 

Unless that car companies reputation happens to rely directly on that one car... Like Nissan and the Z.