The truth behind the gentlemans agreement?

[///M-Spec]

Originally posted by skylineGTR_guy
That would be up to each individual company to decide where that limit is. The laws of economics dictate that all companies want to make as much profit as possible. having a HP war and weakening/bankrupting the other oponents is not a tactic that hasnt been used before.

There are plenty of ways to earn a profit. Ask any accountant and he'll tell you cutting costs is usually the first angle to look at.

Agreeing to a horsepower limit in order to reign in development costs is not a way to make a profit?

Originally posted by skylineGTR_guy
There has to be some reason as to why ALL companies would adhere to it not just a few. Say toyota, Honda decided to go for it, why wouldnt nissan just say screw them and make a car with 320 HP and say hey we are the best!

Because it only works if everyone agrees to it. Once one company declares a car that exceeds the self-mandate, it is no longer useful. This is why a weapons non-proliferation treaty only works if no one builds more new weapons.

And they have been exceeding the horsepower limit. We all know GT-Rs and Supras have exceeded the limit for years. They're just not saying anything about it. Therefore the "agreement" still has preceived value.

Originally posted by skylineGTR_guy
The economics teacher may not have worked for the automotive industry but the laws remain the same for large corporations or mom and pop shops, profits rule.

And I just stated that my theory does not contradict any motive for profit.

Each industry is unique and a lot of smart people devote their entire careers learning the ins and outs of each one. The auto industry has its own rules and special characteristics just like the software business or health care industry.

You can not expect a typical university econ prof. to know everything about the auto industry anymore than you can expect a General Practioner (family doctor) to perform brain surgery on you.


M

 

[skylineGTR_guy]

Originally posted by ///M-Spec
There are plenty of ways to earn a profit. Ask any accountant and he'll tell you cutting costs is usually the first angle to look at.

Agreeing to a horsepower limit in order to reign in development costs is not a way to make a profit?

Yeah but why share the idea with other companies? Just keep yourself within limits and let the other companies ruin themselves. You stay safe while you let your competitors run themsleves into the ground with overspending.

Because it only works if everyone agrees to it. Once one company declares a car that exceeds the self-mandate, it is no longer useful. This is why a weapons non-proliferation treaty only works if no one builds more new weapons.

Weapons treaties are not based on profit and everyone doesn't necessarily have to agree. I'm sure that unless companies were forced to, they wouldn't ALL agree.

And they have been exceeding the horsepower limit. We all know GT-Rs and Supras have exceeded the limit for years. They're just not saying anything about it. Therefore the "agreement" still has preceived value.

Do you honestly belive that no one in the entire automotive industry bothered to question and check the validity of opponents claims? Also add that to the fact that magazines and other media also portrayed the 280 value despite the fact that they had no stake in the agreement or motive to carry on the lie.

Each industry is unique and a lot of smart people devote their entire careers learning the ins and outs of each one. The auto industry has its own rules and special characteristics just like the software business or health care industry.

You can not expect a typical university econ prof. to know everything about the auto industry anymore than you can expect a General Practioner (family doctor) to perform brain surgery on you.

True, I never said he knew everything. But he knows the basics of business. You must know the basics to fully understand the entire topic, you cant run a mile if you haven't learned to walk. No matter how complex something gets the basics are still there. A General practitioner wont know how to perform brain surgery but he knows the basics and knows that surgery is necessary.

In the '70's, each manufacturer was fighting for dominance. Perhaps that type of cooperation was needed in their respective companies infancies, but by the early '90's that wasn't an issue, was it?

The concept of mutual cooperation for the survival of the whole makes no sense after their collective footholds were established, and would not have continued for the sake of courtesy were it not needed.

 

[///M-Spec]

Originally posted by skylineGTR_guy
Yeah but why share the idea with other companies?

Weapons treaties are not based on profit and everyone doesn't necessarily have to agree.

Let's suppose you and I each run a large auto company. I decide that I want to build a sports car, in order to bolster my corporate image. To save development costs, I base the car on a sedan platform from the corporate parts bin. I also lift a modestly endowed engine from my compact car line. I do the math and figure out if I invest 1 million dollars into the program I can make 200 bucks a car at a particular price point and volume. (I'm going to super-simplfy this math) So in order to break even, I'd have to sell 5,000 units. The car ends up selling 6,000 units and I make $200,000 over the course of 2 years. I'm happy because the ROI is better than the interest on the original 1 mil I spent to bankroll the project.

You decide you want a peice of that so you build your own sports car. Except you want to out-do my car with an even more powerful one. So instead of spending 1 mil, you spend 1.5. The extra R&D money turns into a more powerful engine, better brakes and handling to go with it. You price your car identically to mine and figure you'd out sell my car in short order because it is more powerful. However, the special engine in your car makes it more expensive to produce so you only make 150 bucks a car. So in order to break even, you need to sell 10,000 cars. Luckily, your car is so much better than mine, it sells 12,000 units over 2 years and my car's sales plumet. But because your R&D costs were so high, you only actually make $300,000 ROI.

Still with me?

Let's say the actual market for sports cars is about 20,000 units. Along comes neon_duke and M5Power. They both make their own cars, each more powerful and better than yours. Between the four of us, we max out the segment. Your share falls to 4,000 units. Mine is 2,000 and duke and M5Power each hold 7,000 a peice.

Now you need a new car to fight duke's and M5's. So do I. Here's your problem. In order to match the power output of duke's car and M5's car, you need to re-engine yours. Now the R&D cost soars to 2 million. At this rate, you make only make 100 bucks a car because it is so expensive to produce. How many do you need to sell in order to break even on your 2 mil? 20,000. The entire sports car segment.

Meanwhile, my new car is only marginally less powerful than yours. Even if you take duke's and M5Power's share away from them, mine will still sell 4000 units. Suddenly, you're faced with a loss.

Eventually, our profit margins will become razor thin because there's always a balancing act between money invested and a return on that money. Cars become more and more powerful, while we make less and less money per unit. (I realize that the market also grows and contracts, but let's put that aside for a moment)

So what can we do to stop this? The four of us sit down and agree to limit horsepower. This makes sense because adding more power is the most expensive thing to do to a car. If we all agree that everyone's cars are on a equal footing in that respect, then we can spend the money on other parts of the car and even make a little money on them.

Now, this is a grossly simplified explanation of the car business, but the main points hold true. Everytime a car maker improves an existing design --change anything, actually-- it costs money. Adding horsepower is always an expensive thing for a car maker to do --because you have to improve everything else on the car in order to balance it. After a certain point, some car makers might just say "Hey, this is crazy. Why don't we all agree on a max. This way we can all make a little money instead of going broke fighting each other."

Originally posted by skylineGTR_guy
Do you honestly belive that no one in the entire automotive industry bothered to question and check the validity of opponents claims? Also add that to the fact that magazines and other media also portrayed the 280 value despite the fact that they had no stake in the agreement or motive to carry on the lie.

Where on earth did I say that? I said we've known for years some manufactueres 'cheat'. But they don't advertise the fact that they cheat.

Originally posted by skylineGTR_guy
True, I never said he knew everything. But he knows the basics of business.

Does that mean if your econ professor says "that makes so sense to me", he must be right? Is he smarter than the people who actually run these companies?

What exactly about my theory doesn't make sense anyway? I'm not convinced this is actually what happened, but I haven't heard anything that would de-bunk it either.

Originally posted by skylineGTR_guy
The concept of mutual cooperation for the survival of the whole makes no sense after their collective footholds were established, and would not have continued for the sake of courtesy were it not needed.

This isn't about survival of the whole at all. It's about survival of the individual.


M

 

[skylineGTR_guy]

Originally posted by ///M-Spec
So what can we do to stop this? The four of us sit down and agree to limit horsepower. This makes sense because adding more power is the most expensive thing to do to a car. If we all agree that everyone's cars are on a equal footing in that respect, then we can spend the money on other parts of the car and even make a little money on them.

But not all companies are equall, they all have different budgets and income from other parts of the company. Perhaps my company is wiling to accept a loss in the sports car division to maintain superiority. A small price to pay to be #1, If I still have enough remaing profit from other divisions to sustain and fund my company and other companies don't then thats not my problem is it?

Companies know that sports cars don't generate large profits and never will. As I said such an idea would be neccesary in their infancies but not in the 90's after they have already established their footholds. Look at every other car company in the world, they run perfectly fine without such an agreement. You don't think foreign market analysts would have noticed such a thing?

Manufacturers usually only have a few sports cars in their line up, having the most powerfull car and taking a loss is an acceptable business risk when you take into consideration the profits gained on the thousands of sedans, luxury vehicles, trucks etc. that they sell. The sportscar market was never intended to bring in large funds but rather to bring attention and bragging rights to the company. Not everyone wants a sports car, you have to take into consideration the other parts of the company.

Another thing would be why they maintained the original 280. The rest of the world laughs at a sports car that is a twin turbo but still only puts out 280 ps, as the industry advanced don't you think they would agree to slowly move up the limit?

Where on earth did I say that? I said we've known for years some manufactueres 'cheat'. But they don't advertise the fact that they cheat.

Thats EXACTLY my point, If you were in an agreement with someone and they didn't hold up to their end of the bargain would you continue to restrict yourself? Once one of them broke the rules others would notice and the horsepower war would be on again whats the point of faking an agreement if everyone knows everyone else is cheating? The manufacturers don't advertize the fact that they are cheating but why does the media also lie even though they have no stake in the ageement? What possible motive would Magazines, TV etc. have to continue on the lie?

This isn't about survival of the whole at all. It's about survival of the individual.

Once again that is my point EXACTLY, the companies would focus on survival of the individual not the whole. If they can maintain the cutting edge sports car with other profits why not do it? As I said their budgets differ so it would be up to each individual business to decide their limits, not a collective agreement. If I can afford to make a better product good for me. Throughout your entire expanation you refer to the companies agreement with the term "we", that would portray survival of the whole not survival of the individual. As I said Nissan Could care less if in losing money on a horsepower war it managed to bankrupt toyota. Which would never happend because like I said sports cars are not meant to bring in profits.

 

[///M-Spec]

Originally posted by skylineGTR_guy
But not all companies are equall, they all have different budgets and income from other parts of the company. Perhaps my company is wiling to accept a loss in the sports car division to maintain superiority.

I doubt any company today operates under such an assumption. Most auto makers are publicly traded and share holders simply do not tolorate loss-making ventures for very long.

Supra = dead, no replacement
RX-7 = dead, no replacement
300ZX = dead, no replacement until recently

Originally posted by skylineGTR_guy
Look at every other car company in the world, they run perfectly fine without such an agreement. You don't think foreign market analysts would have noticed such a thing?

Another thing would be why they maintained the original 280.

That's a good question. I don't know. Perhaps it is a particular Japanese cultural trait that make them more likely to observe out-dated traditions. But that is just a guess.

Originally posted by skylineGTR_guy
Thats EXACTLY my point, If you were in an agreement with someone and they didn't hold up to their end of the bargain would you continue to restrict yourself? The manufacturers don't advertize the fact that they are cheating but why does the media also lie even though they have no stake in the ageement? What possible motive would Magazines, TV etc. have to continue on the lie?

But they only broke half the agreement. Remember, so long as no one advertises the actual number, the agreement still has some value. As for magazines, I don't really have any idea. Perhaps they like being involved a good inside joke.

Originally posted by skylineGTR_guy
[BOnce again that is my point EXACTLY, the companies would focus on survival of the individual not the whole. If they can maintain the cutting edge sports car with other profits why not do it? As I said their budgets differ so it would be up to each individual business to decide their limits, not a collective agreement. If I can afford to make a better product good for me. Throughout your entire expanation you refer to the companies agreement with the term "we", that would portray survival of the whole not survival of the individual. As I said Nissan Could care less if in losing money on a horsepower war it managed to bankrupt toyota. Which would never happend because like I said sports cars are not meant to bring in profits.B]

I'm sorry, but this entire paragraph makes no sense to me. I also doubt Carlos Ghosn is sitting around thinking of ways to bankrupt Toyota. He's probably more interested in saving Nissan itself from bankrupcy.


M

 

[skylineGTR_guy]

Originally posted by ///M-Spec
I doubt any company today operates under such an assumption. Most auto makers are publicly traded and share holders simply do not tolorate loss-making ventures for very long.

Supra = dead, no replacement
RX-7 = dead, no replacement
300ZX = dead, no replacement until recently

The losses are not unnaceptable when having the status of the "best" car brings in more customers to buy other cars.

Toyota has moved from the supra to focusing on the celica, not as good as the supra but it still has a sporty car.

Mazda has the RX-8, once again not as good but still a sportsacar to compete with the others

Nissan builds more sports cars than any other company (exlcuding ferrari, lambo and other exotic car companies) now has the 350Z and G35

Honda has the S2000 and NSX

sure some of the old ones have been phased out but new ones take their places. They may not be as powerfull but I bet you that the next generation sports cars from Toyota, Mazda and other companies are once again going to become turbocharged monsters sinch I highly doubt the fact that the release of the new GTR will go unchallenged. Think of it as the calm before the storm.

But they only broke half the agreement. Remember, so long as no one advertises the actual number, the agreement still has some value. As for magazines, I don't really have any idea. Perhaps they like being involved a good inside joke.

But if half the agreement is broken then the whole thing has no value, essentially all they would be doing is just hiding the horsepower war not avoiding it like your theory suggests.

I'm sorry, but this entire paragraph makes no sense to me. I also doubt Carlos Ghosn is sitting around thinking of ways to bankrupt Toyota. He's probably more interested in saving Nissan itself from bankrupcy.

As I stated it will never happend and they wont bankrupt each other. That is why they dont need the agreement. Why would they worry about a horsepower war in the 90's but not now? In the 70's it may have been beneficial but they had absolutley no purpose to continue it after the gas crisis. What has changed so much between the 90's and now to make them abandon it all of a sudden? With Ghosn claiming a 400 hp GTR replacement the agreement is clearly over, well for nissan anyway, so what took so long for them to see the light?

 

[skylineGTR_guy]

Perhaps the answer lies in a combination of both ideas, maybe the treaty was the source of the original limit. After the expiration of the treaty, the gas crisis/ horsepower war led to the continuation, that would cover the time before the gas crisis and up to the end of it, all that would remain is to figure out why it has lasted from then till now.

 

[///M-Spec]

Originally posted by skylineGTR_guy
The losses are not unnaceptable when having the status of the "best" car brings in more customers to buy other cars.

There are some exceptions (such as the NSX), but on the whole, I disagree. A car that loses money or is only marginally profitable will be killed. This will happen 99% of the time. GM F-body. Dead after 30 years. BMW M Coupe. Dead. Celica. Dead at end of the year.

Originally posted by skylineGTR_guy
But if half the agreement is broken then the whole thing has no value, essentially all they would be doing is just hiding the horsepower war not avoiding it like your theory suggests.

Not nessessarily. If there is some degree of uncertainty amoungst the consumers, it still has some value. Besides, this is Japan we're talking about. They are famously good at denial.

Originally posted by skylineGTR_guy
As I stated it will never happend and they wont bankrupt each other. That is why they dont need the agreement. Why would they worry about a horsepower war in the 90's but not now? In the 70's it may have been beneficial but they had absolutley no purpose to continue it after the gas crisis. What has changed so much between the 90's and now to make them abandon it all of a sudden? With Ghosn claiming a 400 hp GTR replacement the agreement is clearly over, well for nissan anyway, so what took so long for them to see the light?

My theory explains why Japanese car compaines may be motivated to enter such an agreement. Exactly why they did so, only they know for sure. As for why they don't anymore, I haven't a clue. Maybe they just got tired of lying?


M

 

[skylineGTR_guy]

Originally posted by ///M-Spec
My theory explains why Japanese car compaines may be motivated to enter such an agreement. Exactly why they did so, only they know for sure. As for why they don't anymore, I haven't a clue. Maybe they just got tired of lying?

The thing that really bugs me is the lack of information on the whole subject, its as if no one in japan cares. You would think that such an agreement would bring lots of press attention since it is rare that manufacturers agree on anything. But I cant find one official document to support any of our claims (other than the treaty signed after the war but thats not very clear and doesnt state anything about the 280 limit) So a restriction was there after the war, and some kind of restiriction during the gas crisis. there were also restrictions on exports to the US. It's all very confusing. The onyl way to find out might be to call the marketing department of the companies in japan and tell em it's for a research paper. Anyone here speak Japanese?

America has had horsepower wars with Dodge, Chevy, Ford Etc. and all of them are still around, So I still don't know why japan would choose to resort to such a thing if the rest of the world works fine without it.

 

[Glut]

The problem with the lack of information is that it is unknown if an agreement actually exists. All that is known is that all of a sudden a bunch of companies suddenly decide to limit the power of their sports cars to 280 ps claimed max power.
Even the phrase 'Gentleman's agreement' is a construction by outsiders.

280 was a reasonable limit 10 years ago, but obviously not anymore, given the amount of deviations from that 'limit'.

Also, companies are willing to support loss making vehicles if they make up for it in other ways, such as 'halo' effect cars that are supposed to make the whole range seem better and homogolation (sp?) vehicles for motor racing.

 

[skylineGTR_guy]

Originally posted by Glut
Also, companies are willing to support loss making vehicles if they make up for it in other ways, such as 'halo' effect cars that are supposed to make the whole range seem better and homogolation (sp?) vehicles for motor racing.

Thats what I was talking about, its an acceptable loss due to the attention it brings to the company

 

[liquidyellow]

Interesting disscusion, I always thought the PS cap was to keep the eco warriors and safety numptys happy similar to the 155mph top speed cap on many european cars such as BMWs, Mercs, Jags etc...

 

[///M-Spec]

Originally posted by Glut
Also, companies are willing to support loss making vehicles if they make up for it in other ways, such as 'halo' effect cars that are supposed to make the whole range seem better and homogolation (sp?) vehicles for motor racing.

I strongly disagree. If this were true, every company would have a supercar. But in fact, few car companies are cash-rich enough to afford this and no one goes into business to piss away money. NO ONE.

There is also massive evidence to support the contrary. What happened to performance flagship cars like the Supra? The RX-7? The Camaro? Firebird? The BMW 8 Series? M Coupe? The Porsche 928? The 300ZX was pulled from the US market in 1995 and the 350Z didn't come back until '03. That is an entire product cycle. Why doesn't Honda import the RSX Type-R to the US? Surely you could make a case the 'halo' effect on the RSX brand would be worth the potential losses?

Like I said in a previous post, 99% of the time a car that does not make money --or at least pay for itself-- will be scrapped. If a car company is on a major upswing, then maybe a board of directors will approve a high-profile risk venture like a Mercedes SLR or Audi LeMans.

True homologation cars are a different matter. The business case for a homologation special is tied into a racing budget. The car may or may not be expect to make money, but is considered cost-of-entry to go racing.


M

 

[Glut]

Racing itself is a loss making venture that attempts to bring a halo to the range. It's fairly rare to make money out of it.
'Halo' cars are fairly common. For instance, it's well known that Holden were making a loss on every Nissan-engined VL turbo that they sold, yet they did it anyway.
It's not pissing away money, it's marketting.
Like concept cars. They cost a fortune, often have nothing to do with commercial reality, but they get people excited.

So they're still subject to commercial realities, but it's more complex than just whether that model makes a worthwhile profit.

Why doesn't Honda import the RSX Type-R to the US? Surely you could make a case the 'halo' effect on the RSX brand would be worth the potential losses?

Obviously Honda thinks that the Type-R will not bring enough buyers to the 'normal' RSX to make the Type-R worthwhile.
But you can clearly see the effect in motion by the amount of people who buy lower spec civics and the like and pretend that they're type-r's.
Or people who buy a VP commodore and stick a HSV VT GTS bodykit on it.
(yeah, I'm picking on Holden because they're very good at the halo thing)

 

[skylineGTR_guy]

this quote was taken from an article I found:

Japanese corporations adopted a different mindset that encouraged a more farsighted strategy. The Honda Insight, Honda's first hybrid car, sold for about $6,500 below cost. Toyota was losing as much as $16,000 per car on its first-generation Prius. But as Hisao Suzuki, president of Honda's European R&D Division answered when asked why they would sell a car at a loss, "We are investing in the future."

If it applys to hybrids it applys to sports cars too, the loss is acceptable considering the "marketing" the car does for the company. Eventually the loss would be recouped

In 1997 Toyota launched its money-losing hybrid with a production capacity of 1,000 per month. In December 1997 Business Week sorrowfully surveyed the entries in a recent car show. "While Toyota launched the world's first production hybrid gasoline and electric car, General Motors countered with a big new Cadillac and Chrysler showed off its gas-guzzling Dodge Viper muscle car." Detroit pooh-poohed the Japanese companies' achievements. "I don't see six months difference in anything that's being done," harrumphed GM Chairman John F. Smith Jr. As Business Week reported, "the only difference, say the Big Three, is that Japanese manufacturers are willing to accept huge losses."

Despite its losses, in 1999 Toyota announced it would introduce the Prius to the North American market in mid-2000, "shocking the domestic auto industry" according to industry observer David Chao.

I forgot what the term was for monetary losses that are justified due to some other benefit. I'll have to pull out my books and find the explanation.....

Anyway stiff market competition will force companies to make cars faster and cheaper than before, I mean look at the computer industry. Everyday things are becoming better and cheaper. Thats good both for the consumer and manufacturer. So after seeing that these super powerfull cars wwere becoming too unafordable they would be forced to find ways to keep them powerful, but make them cheaper and still maintain quality. Sure its a pain and an expense for them but making money costs money.

 

[///M-Spec]

Originally posted by skylineGTR_guy
If it applys to hybrids it applys to sports cars too, the loss is acceptable considering the "marketing" the car does for the company. Eventually the loss would be recouped

It's called long term investment, and sure it happens all the time. But it usually goes into developing technologies like hydrogen cells or direct reinvestment like re-tooling a plant. It is rare to see an automaker shell out serious bucks to make a car that is likely to loose money. Almost never.

And the reason why Toyota and other companies invest heavily in loss-making hybrids is because governments force them to, in the form of big subsidies and CAFE and emissions laws.

Originally posted by Glut
So they're still subject to commercial realities, but it's more complex than just whether that model makes a worthwhile profit.

I didn't say sports cars need to make a profit. I said sports cars need to at the very least pay for themseleves. In this day in age, no one will try to make a business case to a CEO by saying "we're going to lose 20 million a year on this car, but it will make us look good." Sorry, I'm just not buying it. I gurantee you the Corvette, S2000, 350Z, M3, etc. are making money for their owners. If they stopped generating revenue, they will go away within a few years.

I believe we're at a deadlock. Since none of us has access to project proposals for all current sports cars in production stating a business case, this entire conversation is only conjecture. There is no proof.

Maybe I'll dig around some annual reports to see if there is a profit breakdown by model. Till then we'll just have to agree to disagree, wouldn't you say?


M

 

[skylineGTR_guy]

In 2003 Nissan made $4 billion dollars Producing one sports car that loses 20 million a year isn't a big deal.

 

[///M-Spec]

Originally posted by skylineGTR_guy
In 2003 Nissan made $4 billion dollars Producing one sports car that loses 20 million a year isn't a big deal.

20 mil. was a random, arbitrary number I made up and shouldn't be construde as of some kind cut-off I'm trying to illustrate. At some point, a number becomes signifigant to a company. It may be 20 mil. It may be 200 mil. When a company decides it is signifigant money, it will cut its losses and move on.

No one gets to making 4 billion in earnings by saying losing 20 million is no big deal. That doesn't make a bit of sense to me. Have you considered that Nissan's earnings were achived by cutting off its money-losing operations? Perhaps the reason Nissan got into trouble in the first place was because executives around a table said "Oh, its just 20 mil. What do we care? We're Nissan."

Tell you what. You find documented proof that the Nissan loses signifigant money on the 350Z and I'll happily retract my statement. To define signifigant, let's take Nissan's earnings and say 2% of that. That's 80 million. Sound fair?


M

 

[skylineGTR_guy]

Originally posted by ///M-Spec
20 mil. was a random, arbitrary number I made up and shouldn't be construde as of some kind cut-off I'm trying to illustrate. At some point, a number becomes signifigant to a company. It may be 20 mil. It may be 200 mil. When a company decides it is signifigant money, it will cut its losses and move on.

No one gets to making 4 billion in earnings by saying losing 20 million is no big deal. That doesn't make a bit of sense to me. Have you considered that Nissan's earnings were achived by cutting off its money-losing operations? Perhaps the reason Nissan got into trouble in the first place was because executives around a table said "Oh, its just 20 mil. What do we care? We're Nissan."

Tell you what. You find documented proof that the Nissan loses signifigant money on the 350Z and I'll happily retract my statement. To define signifigant, let's take Nissan's earnings and say 2% of that. That's 80 million. Sound fair?


M

Companies are smarter than that, if they were to actively engage in a horsepower war they wouldnt produce tens or hundreds of thousands of cars that would make an 80 million dollar impact. They would just make a few thousand "limited editons" to prove they are best then be done with it. Just because they would lose money doesn't mean they have to lose ALOT of money. Look at all sports cars, when compared to other models their prduction numbers are really low, reflecting that not much profit is made however they are still produced. To win a horespower war your car needs to actually be in production, however it does not have to be mass production that would hurt more than it benefits the company through "advertising"