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Originally Posted by Jaxonalden
Those costs seem comparative if you look at it from a demand point of view. Boxster engines *POP* 99% more often than a Lexus/Toyota power plant so it would only make sense to ask more for a product that moves.
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Two Points:
1) Actually, in things like replacement parts for cars that are no longer made, fast-selling large-volume parts are always cheaper than slow-moving, low-volume parts. ie, price a top for an MGB vs. a similar top for an Alfa Giulietta
2) While cost-to-build has some component in pricing cars and car parts, it really only establishes a minimum price. For instance, if Porsche's cost plus 20 percent markup on an M96 was $4,000, then that would be the minimum they would sell it for, because otherwise they would lose money. But there is NO limit on the upper end, is there? That's called "what the market will bear." And because Porsche is not very motivated to sell replacement engines, they are not interested in that market. So they charge a bunch. So that you will buy a NEW car. Which is what they sell. Isn't it interesting that nobody can rebuild an M96 for less than Porsche will sell you a replacement for? They know that. If rebuilds are going for more than 12k, why would they sell motors for less than that, even if they could build them for $300? They might do it for "customer good will", or if they were trying to gain a foothold in the market, or some intangible like that. All valid reasons. But Porsche enjoys a position of great customer good will and retention, and they are among the most profitable companies in the world in any field, and THE most profitable in automobiles.
I'm not "justifying" any of this or saying it's right or good or whatever. But it's a fact of life. Ya gots to pay to play. Simple as that.
Matt
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