When an economy begins to show signs of change, consumer spending habits show signs of change. One might think this tendency would affect how people “trick out” their cars. But does it?
Revenge Designs Inc., a specialty car designer and production assembler, works to enhance production cars while modestly improving vehicles that might be called classic “muscle”/performance cars. In its current form, the profit potential for the high performance portion of the business may be a bit limited, owing to the general nature of the performance car segment as constituted by the company. The potential for the production car enhancement aspects of the business, however, shows potential due to price mark-ups and the personalities and pocketbooks of the enthusiast.
Success in the performance portion of the business hinges on a different set of marketing strategies then the production side of the business. Each relies on the other in a certain advertising sense, but the performance aspect of the business does not necessarily rely on the production part of the business as production does on the performance portion.
Although company management has been involved in this business for quite some time, the company is currently working through issues surrounding small business growth. The main issues involved are fairly typical for a small company although ownership has exercised sound judgment in releasing outside vendors that clouded transparency. Recent acquisition of property for growth prospects, adjacent to current facilities, shows promising optimism but timing may be an issue. Consumer spending patterns and the general US economy, in the shorter term, may be changing. Attention should be paid in this regard.
Production car modification is largely the business of reselling higher performance parts for a standard production model. The parts involved have fairly high margins but can easily be done without if personal income drops. However, one should never underestimate the fanaticism associated with modifying ones car. Many people who do modify their cars are passionate about them and will spend outside of what might be called responsible spending patterns.
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