[Leica] CL Profitability

[Stephen <cameras@jetlink.net>]

 From: Peterson_Art@hq.navsea.navy.mil

>
>
>      Mike,
>
>      In addition to your thought below, that "there exists no cheaper
> M
>      body simply because it would steal sales from the M6 and hence,
>      precious profit from Leica," there was Stephen Gandy's assertion
> on
>      02/08/98, that "The CL almost certainly outsold the M series
> during
>      those years, therefore endangering the M...[and so]...Realizing
> that
>      it was a shrinking market, Leica sensibly decided to kill the
> small
>      camera to keep the M alive."  But I don't believe it!  This would
> be
>      bad economics and bad business.  You don't kill your hot sellers
> in
>      order to protect unpopular products---that's a plan for
> bankruptcy.
>      Rather, if anything, you just raise the prices of your hot
> sellers,
>      thereby maximizing profits.  If companies acted as you and
> Stephen
>      suggest, none of us would be driving cars today, because
> companies
>      would have killed the "horseless carriage" to protect buggy
> sales.
>
>      Although I have no idea why Leica discontinued the CL (and
> frequently
>      bemoan its passage!), I cannot accept the reason you and Stephen
> have
>      suggested.
>
>      Art Peterson
>

 Art,

Consider that  the CL was not a professional level camera, although it
was certainly a great little camera.

In that context CL sells probably did eat into M sales severely--at
least in the short run.  Yet the Leica Rangefinder System's  future was
clearly very serious amateurs and professionals.

If the M line did not stay in production due to lack of sales, the
entire future of the Leica Rangefinder System was threatened.

The figures I quoted for productions of the M4 and M5 are easily
verified.  The allotted figures quoted for the CL are also easily
verified.

Strangely enough, Leica has NEVER released the true production figures
for the CL, even though its over 20 years ago.

It was VERY hard for Leica to sell it's M5's new competing with the
CL.   Unsold new M5's were still on dealer shelves five years after the
camera's demise.      In contrast, the CL's were long gone.

M series production actually stopped for three years between 1976 and
1977, due to the fact new M5's went unsold.   In contrast to the CL!

You state  "You don't kill your hot sellers in order to protect
unpopular products."    It wasn't that the M cameras were unpopular, it
was that the market was temporarily saturated.   In the long view of
things both cameras could not survive, and the CL could not survive by
itself because it was not a professional quality camera.

If you choose not believe the above scenario, fine, but I would
appreciate seeing  a better one to explain the known facts.

Regards,

Stephen Gandy