05 Explain two ways an increase in consumer income might affect a luxury car manufacturer. [8]

[Sir Afzal Shad]

05 Explain two ways an increase in consumer income might affect a luxury car manufacturer. [8]

Please read the answer of the previous student & if the answer seems well developed don't use the same KN in your answer, try to give new one.

[masabtahir]

kn] increasing consumer income will increase luxury car manufacturer demand
ap] for e.g. when consumer income will increase then they will be able to afford luxury cars
an] this will increase the sales of luxury car manufacturer and make their business get establish in roots with good profit and more innovation from them will be expected by them in luxury cars
an+] this will make new brands to enter in market with luxury car brand manufacturer

kn] increase in consumer income will create a competitive market of luxury cars which will decrease car prices
ap] for e.g. when more companies are in one market so to attract customer, they reduce price of their cars
an] this makes a demand of cars and high sales are expected for the cars in the market and will make the market strong of cars
an+] this will increase the industry and expand it

[sarah_naeem]

[KN]: Increase in consumer income makes consumer less sensitive to price making luxury car manufacturer to be able to charge higher prices without losing many customers.
[APP]: For example, if a luxury car manufacturer adds new features to luxury cars like installation of LED lights in the car, better quality leather seats etc. people would easily be willing to pay higher prices for such features due to rise in their incomes.
[AN]: Thus, this would lead to increase in profit margin, improved brand image and improved financial performance of business.
[AN+]: Furthermore, leading to a long term successful business.

[KN]: Another way is that it would lead to more customers purchasing luxury cars and increase the sale of a luxury car manufacturer.
[APP]: For example, when consumer income increases more people will be able to afford a luxury car as luxury cars are a desire not a need so when more people have higher incomes they would be willing to and would be able to buy luxury cars.
[AN]: Thus, this would lead to increase in customers which would further lead to increase in revenue which could be invested and could help business further expand
[AN+]: Furthermore, leading to an improved cashflow and increase in wages of employees which motivates them to work harder.