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by tgaj
300 days ago
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To match the offer to the market - if the base engine is more powerful than the market standard at a given price then you can lower the power because the customer will not choose another car on that basis anyway. And you can take more money from enthusiasts. |
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1) Build engine with $market_leading_horsepower.
2) Throttle engine so that base models of a car have $market_leading_horsepower - $throttle_amount.
3) Price discrimination for enthusiasts removes the throttling back to the original $market_leading_horsepower while also saving the effort of having to design a faster engine.
Is there no extra cost associated with machining the faster engine? That is, would manufacturing a slower engine for the base model not be any cheaper than just building the fastest engine they can into all models?