Yes, I'm stating that companies lose profit if they lower prices when they do not have to. Might not be an actual lose, but they will surely not be making the most money they can. And I agree, the exchange rates screwed over the rotary. If mazda/ford wanted to they could transform a current Ford factory into a rotary production plant here in the US, but then again, it would be to costly if the 8 did not do to well.

 

I don't know how auto manufacturers set up their facilities, but I would think the startup cost for a rotary engine plant is more expensive in proportion because they're so uncommon. The actual engine production, once the plant is set up, might be cheaper, but I would think the plant itself is more expensive.

If you want to manufacture a piston engine, there are probably hundreds, or maybe thousands, of manufacturing facilities that do the same around the world. You can copy their techniques, easily outsource portions of the production process, and get a lot from other vendors. Not only that, but you can put suppliers in a bidding war with each other to reduce costs.

To make a rotary engine facility, the only resources Mazda has is knowledge from previous Mazda manufacturing of rotary engines. Any specialized equipment for the job has to be custom made. They can purchase the metal and plastics from the same places everyone else does, but they need unique configurations.

I could be totally wrong, of course. This is just a guess.

 

Perhaps, but it does not seem to have had much effect in the last 10 years.
In November 1995 the dollar/yen rate was 1-102
In November 2002 it sat at 1-102
Today it is at 1-109

More interesting is that in January it was at 1-120, but we have seen no price changes this year from the Japanese auto makers.

If that were a truly important factor one would see that the price of the RX-8 would have changed, but it has not.

It is pretty well a given that when rates change out of their favour they will howl and complain.

But when it changes to their favour do they complain? Of course not!

These are businessmen, and they play it up and down, just as people do in the stock markets.

As for the cost factor due to exchange rates, about the only variable that is affected is the cost of labour involved.

If we take that into account the change in cost and price should not be that significant. Remember, when the rates changed as drastically as they did the Japanese automakers had an inventory, which rose in value. This offset the cost increases for at least one year.

 

We can argue as much as we want, but we will never reach a definative answer unless Mazda releases some information about costs, which IMO they never will. Who knows how much each RX-8 costs to build for mazda. Could be half the amount at invoice, 1/4, 1/3, and so on. Your guess would be as good as mine.

 

Last attempt: Lowered production costs lead to increased profit.

If you believe that Mazda feels that they have a monopoly and can set their prices artificially high, why would they lower prices if their production costs went down. If a manufacturers production costs go down, they make more profit.

Whatever the case, this is all economics and perhaps some economics people would want to discuss this further.

 

Looks like many people disagreed that the Renesis is expensive to produce, but I looked up my reference for that: Bob Hall, a journalist who spent ~14 years as a product planner for Mazda (1982-1996) and is credited as being the father of the Miata, participates regularly at www.miataforum.com under the username bwob. In this thread discussing the possibilities for the next generation Miata, he wrote:Given that Bob spent 14 years in Mazda's employ and still has many contacts within the company, I tend to trust his statements regarding Mazda!

Regards,
Gordon

 

I'm not aware that car manufacturers normally change msrp month to month. I am sure that they are aware that exchange rates vary. Like I mentioned before, one of the reasons for the Japanese manufacturing plants in the US is to mitigate the exchange rate issue. As the RX-8 and the rotary engines are strictly built in Japan, they are affected by exchange rates more than say the Mazda6.

To (over)simplify things a bit, if it cost 2,000,000 yen to manufacture a car in Japan, an exchange rate of 1-110 (dollar/yen) would mean a manufacturers cost of about $18,182. If the exchange rate changed to 1-220, the manufacturers cost would be about $9,091. As companies are in the business of making money, the manufacturer would then lower the cost of their car to make it a better option than their competitors and sell more cars.

I'm sure you must be aware of this but I'm not sure why you don't think that exchange rates were a "truly important factor" in the price rise of the last RX-7.

The variable that is affected would be the manufacturers entire cost for manufacturing the vehicle yes? If it cost 2,000,000 yen to manufacture a car in Japan, an exchange rate of 1-200 (dollar/yen) means that the manufacturer could sell the car for anything over 10,000 + export/certification costs and make money. An exchange rate of 1-100 would mean that the manufacturer would have to double the US price in order to just break even. This similar to what happened to the Japanese sports cars in the mid-90s. When the prices of the Z, Supra, RX-7 started getting close to the $40,000 mark, they were not quite as attractive as they used to be and they didn't sell.

Whatever the case, I'm not really here to discuss supply/demand and economics. I originally posted some info on the reported cost of the renesis and got sidetracked because I couldn't understand how anyone could think that all of the Japanese manufacturers would arbitrarily raise the prices of their cars in the mid-90s so that they could lose money.

 

Once the plant and equipment are in place the marginal cost of each engine is probably not that great. Because of fewer moving parts, etc., that should lower the price. But the fixed costs of the rotary are probably high because it's unique and takes unique equipment (plust they want to cover the fixed costs of the R&D they put into it). Mazda, with its monopoly power over the rotary is able to recoup those fixed costs of both machinery and R&D.

 

LOL i always seem to stir up the sh*t dont i?