The law of supply and demand is pretty much "all the traffic will bear." With all the good press, GM is confident it can slip 4 or five more grand on each sale in their pocket, It will no doubt work for a while, but at what cost? Some new buyers who are on the teetering point of being able to buy, or justify buying, will move on, and likely not return.
Those who ignore history are damned to repeat it. A lot of us old fogies remember the old days of full production by the big three. Every three years the UAW (or steel companies or tire companies) went to the companies, threatened to shut them down, and walked away with a big new contract. The big three rolled over, because they just raised the price of new cars to offset the contract, and added a little for the shareholders while they were at it. Those who made it to Econ 601 recognize that, depending on the item, a certain percentage of buyers fall out of the market with price increases regardless of the reason. It doesn't matter if the increase goes to shareholders, banks, execs or whatever. The buyers are gone, and someone else gets the business.
Truly successful companies are long sighted, and don't charge all the traffic will bear, hoping to develop life-long customers. Look at Toyota. They have built a really loyal customer base with a line of truly ordinary, sometimes boring, vehicles.
The GM pig feeds at a different buyer's trough than Porsche, Jaguar, etc. Price counts.
I hope I'm wrong, but once done, the damage is permanent. I'd like to see GM sell 35,000 Vettes a year like they did until recently, but it appears they want to make the same money without having to mess with making so many cars.
4LT GS Roadster
