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Tractor Talk Discussion Board

Re: Someday a price will shock me


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Posted by ss55 on April 24, 2015 at 23:03:40 from (173.16.23.173):

In Reply to: Someday a price will shock me posted by rrlund on April 24, 2015 at 15:10:09:

I guess it's all in your perspective. CIH and other dealer's prices may seem ridiculously high, but the sales volumes are probably so low that if you crunched the numbers I doubt they would cover the real costs to the company.

I am somewhat amazed that you can still get new OEM parts off the shelf at any price for a forty year old machine, sold in low numbers (less than 1000 per year?) by a company that went through bankruptcy thirty years ago and has changed corporate ownership two or three times since them. Many companies discontinue support for their obsolete machines, or only produce repair parts to order instead of stocking parts in inventory.

Did IH design their drill to use standard off-the shelf tubes available almost everywhere or are the tubes a special design only used on a few models of IH drills? If the tubes are a special design, what would it cost for another company to draw up those parts, build production molds and tooling, produce, inspect, package, transport, inventory, warranty and sell those parts in small quantities if the parts became NLA (No Longer Available) from CIH-NH? At a price of less than $25 each, today's sales volumes would probably be too low to ever recover the initial investment, much less return a profit to an alternate producer.


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