[switchlanez]

^Sorry, got lazy there and threw some abstract jargon at you. Maybe I can explain by numbers.

Say it costs Toyota $18k to make/sell each FR-S and $15k for each tC. Let's say the tC sells for $20k at the dealer and the FR-S sticker price is variable (see below). Profits for varying FR-S price points could be:

[Case 1: FR-S = $23k]
Projected demand: 9,000 FR-S vs. 5,000 tC
FR-S profit: $45,000,000
tC profit: $35,000,000
Total profit: $70,000,000

[Case 2: FR-S = $25k]
Projected demand: 7,000 FR-S vs. 7,000 tC
FR-S profit: $49,000,000
tC profit: $35,000,000
Total profit: $84,000,000

[Case 3: FR-S = $27k]
Projected demand: 4,000 FR-S vs. 7,500 tC
FR-S profit: $36,000,000
tC profit: $37,500,000
Total profit: $73,000,000

I hope my demand numbers make sense. I basically thought the lower the FR-S price, the more it will steal tC sales [Case 1]. But if Toyota prices the FR-S too high they'll definitely sell more tCs but barely any FR-Ss [Case 3]. In both cases 1 and 3 they will profit, but the sweet spot which maximizes profit is in Case 2. It's a super simplification but hope it makes sense.

A quick death from poor sales of the FR-S won't happen because Toyota is smart enough to avoid that... they plug in a price and their analyst (most likely a computer) automatically chugs out how many units to produce to still be profitable then do the whole profit optimization thing (like I tried to do above) when compared against the car market. For sure tC sales will be lower next year so they will cut back on its supply to exactly meet projected demand and profit from it.