Quote:
Originally Posted by PA FAST
I am confused, unless you order the option how does it raise the price of the car?
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Spreading the costs. I have assumed a bunch of numbers here so don't take any of them as fact. A nav system costs around $2000. Now the components themselves cost less than $2000, probably closer to $500 -this is more than portable units because they won't be buit in the same quantity and will have more complex casings and mounts. A good portion of the money for options gets pocketed by dealers, lets say half to a third, so thats about $800. That means that GM 'pockets' $700 from every $2000 nav system. Lets assume that 10 000 Camaro's each year would have been ordered with nav. That makes for $7 000 000. However, the costs of development as well as the extra tooling required to make 2 different interior sets would likely exceed that. So the price of every model will have to go up to absorb these costs. So rather than adding $1000 to every nav unit (that would decrease sales of the units, requiring a further price hike) it is more appealing to add $100 to every car.