Freebie marketing

"Cars won't need to have a spare tire as of Sept. 15" ran the headlines this week. Although this was presented mainly as a victory for motorists, the car manufacturers are of course the big winners. They'll be able to shave Kč 1,000 or more off the production cost of a new vehicle by including only a tire-repair kit or a can of fix-a-flat spray. It also brings the car industry a step closer to the business model pioneered by Gillette of charging a relatively low price for razors and making money on the throw-away blades. GM Jan Laube of Ford told HN that his company's goal on the Czech market is to break even on car sales and to generate its profits on parts and services. Cost- conscious consumers will now need to be more diligent in factoring in these two rapidly rising costs. At some point, it might become cheaper to just throw out the entire car - or turn it in for a scrap subsidy - when a tire goes flat. [Czech Republic Proctor & Gamble Hospodářské noviny]