Smitty,

Your point about pricing the product -- any product -- at a compelling price
point in order to build sales is absolutely true. A good product that is
priced to give great value is going to sell a lot, no question.

However, personal aviation has some structural limitations -- it is not for
everybody and never will be. It will always be a pursuit for a relatively
small segment of the population, for a number of reasons -- it is
challenging, it is risky and it is expensive (even if prices came down by
half it would still be expensive).

The personal airplane will never be a car, or even a jet ski or a
motorcycle, in terms of sales potential. Which is probably a good thing,
considering how many bad drivers and riders and boaters there are -- and how
many more bad pilots there would be. (Not that there aren't already).

And because there will never be a million personal planes sold, personal
aviation will always be something of a cottage industry with the attendant
poor value. The best we can hope for is a modest improvement, which is the
idea of sportplanes.

The idea was that by loosening the regulations, it would be possible to
build small airplanes more cheaply, and thereby provide better value and
attract new buyers. However, we are seeing just the opposite. The first
sportplanes actually give you less for your dollar than the Cessna I
mentioned.

I cited the Cessna not because it's a great deal by any stretch of the
imagination, but because it is still a better value than the new
sportplanes -- a lot better value any way you look at it.

This is a problem, because the whole idea behind sportplanes was to provide
a more compelling value propostion, not less. However, the people making
them have taken the marketing approach you see in movie theater snack bars:
There is no other place to get popcorn so why not gouge the customer? So you
look at a small bag of popcorn that costs eight dollars and you think to
yourself, "man that is a gip." And so the large box of popcorn which only
costs two bucks more, but is actually about five times bigger, doesn't look
so bad in comparison. Sure you're paying ten bucks for a crummy bag of
popcorn, but it's better than saving two bucks and getting one fifth the
product.

It's the same thing here. That $150,000 Skyhawk doesn't look so bad in
comparison to a $100,000 putt-putt that is not even one-third the airplane.
I bet the Cessna executives must be having a pretty good laugh looking at
the prices of some of these planes -- and no doubt shaking their heads.

But I agree wholeheartedly with your point that if these outfits building
sportplanes were smart, they would take a page out of old Henry's book and
price them to move. I do believe that some will eventually wake up to that
fact -- the economics are very real and viable, despite some of the comments
from those in industry who would have us believe that it is impossible to
build a plane for $50,000.

It is possible and it will be done. The main stumbling block, regulation, is
out of the way now. All that remains is for one smart individual to run with
this idea -- perhaps the Henry Ford of sprotplanes is still out there.

Regards,

Gordon.



"Smitty Two" wrote in message
news
In article uNZWe.123865$084.68527@attbi_s22,
"LCT Paintball" wrote:


Go look at a new car lot, and then go look at some new airplanes, and
give me ONE reason why an airplane costs ten times as much as a car.



Because there are 1000 cars sold for every airplane. The cost of special
tooling isn't being absorbed by enough volume.

Volume, my ass. I'll go back to Henry Ford again. The Model T was priced
at $825 when it was introduced in 1908. He continually cut prices. By
1916, the cars sold for $345. Every time he cut prices, more people
could afford cars, and his volume went up. Every time his profit per car
went down, his total profit went up. It was his pricing policies that
made him the largest carmaker in the world. And his accountants,
investors, competitors, and everyone else thought he was crazy. Yeah,
sure.

That's the real world. You can't wait for increased volume to decrease
prices. You have to work it the other way around. People here are saying
Skyhawks are a bargain at $150,000? What percentage of Americans can buy
a toy of that magnitude? Price them as though you were going to sell a
million a year, and by god, you will.

Try selling a product to Home Depot, as I've done. They RETAIL stuff for
less than their competition can buy it for. Why? Volume. You don't tell
them what your product costs, they tell you what they'll pay. Go to
Continental and Lycoming and tell them you want to buy a million
airplane engines per year, but you need the price to be $6500. Ask them
which one of them wants the contract. They'll probably both come back
begging to undercut that target.

Jeez, I've gotten myself all worked up again. I guess I better get a
small glass of wine and go back out to the shop and squeeze a few rivets
on the RV.