Struggling With Profitability

[Lutzfan]

On my current game. see attached, I found that once the Great Depression hit I haven't been able to maintain new profitability. During the first two to three years of the Depression I was able to maintain some net cash flow, mainly due to OEM part sales, but now even that has mostly dried up. I have over 7 Billion banked so I'm able to sit on that fairly comfortably. However, I'm unsure if I'm just supposed to sit on my low earnings and declining market share and try to ride this out to 46' where I hope I'm able to return to some level of stability. Or am I making some major mistakes which is causing me to be in this current position?

[Eric.B]

Unfortunately, I don't see any files attached. If you're trying to upload a save game, you'll have to zip it first.

In general, the great depression is just that, a great depression. It's very difficult to turn a profit during this time. I would suggest cutting unprofitable branches and tighten up your excess expenses. You can view this an opportunity to buy out some of your struggling competitors. By the end of the 1930s, things start to turn around. But then you run into WW2. Depending on which version of the game you're playing, you should be able to make a healthy profit via military contracts or munitions productions. After that, it should be fairly smooth sailing.

[Lutzfan]

Unfortunately, I don't see any files attached. If you're trying to upload a save game, you'll have to zip it first.

In general, the great depression is just that, a great depression. It's very difficult to turn a profit during this time. I would suggest cutting unprofitable branches and tighten up your excess expenses. You can view this an opportunity to buy out some of your struggling competitors. By the end of the 1930s, things start to turn around. But then you run into WW2. Depending on which version of the game you're playing, you should be able to make a healthy profit via military contracts or munitions productions. After that, it should be fairly smooth sailing.

I added it in as an edit to the post, is it visible now? I'll also attach it here.

[Eric.B]

I took a look at the save file. You seem to be doing fairly well. You are only losing $10-$20 Million per month. If you wish to turn your company to profitability during these times, there are a few things you could do.
You could cut expenses. If you cut R&D expenses (researching new components, and research teams) and cut your Racing Budget, you would be profitable again. Looking at your City Sales report, you have 21 unprofitable branches. You could close those and save $850k - $3Million.

Transportation Costs is your highest expenses. Since you have a lot of spare production capacity, you could "Restrict Shipping to same Region/Continent". You can find this toggle in the Auto-Production panel. (Factory->Production). If you do this, you need to monitor production capacity in each continent to make sure you do lose sales.

Alternative to cutting expenses, you could try to grow your way back toward profits. You would do this by lowering prices. I didn't look at your current margins, but if you have high markups, this would be an option. Otherwise, cutting expenses is generally a better way to go.

As a quick test, I restricted auto production shipping and turned a $5,171,129 positive cash flow in 6/1936. But did miss about 25 sales in Europe.

[Lutzfan]

I really appreciate it! Yes, I did not realize that there was an option to automatically restrict production to the same continent, that probably would have saved me millions if not billions of dollars back when I was produced 5 million cars a year during the 20s. This also caused me to begin examining the auto menu more and I realized I could also set sales prices by region as well which also probably could come in handy to help account for economic differences between regions.

I still do struggle a bit when it comes to pricing properly. Both from a design and sales perspective. I try to focus my marques on different economic segments of the market, but it can be hard alone from per capita number to gauge what people are willing to spend for a specific vehicle type. Clearly some designs are focused to a specific price range, such as lower for compacts and higher for luxury sedans. However, beyond that many are vague. I am putting out a range of six sedans, (really five, one is just for racing) and still not feeling as though I am putting out enough cars to fit the entire market. This is becomes even harder for the more specific vehicle types. For example is there room for an inexpensive luxury car, or a Rolls-Royce level micro car?

[Eric.B]

I really appreciate it! Yes, I did not realize that there was an option to automatically restrict production to the same continent, that probably would have saved me millions if not billions of dollars back when I was produced 5 million cars a year during the 20s. This also caused me to begin examining the auto menu more and I realized I could also set sales prices by region as well which also probably could come in handy to help account for economic differences between regions.

You can also use the districting system to manage multiple locations as if they're one. That saves a whole bunch of time as well.

I still do struggle a bit when it comes to pricing properly. Both from a design and sales perspective. I try to focus my marques on different economic segments of the market, but it can be hard alone from per capita number to gauge what people are willing to spend for a specific vehicle type. Clearly some designs are focused to a specific price range, such as lower for compacts and higher for luxury sedans. However, beyond that many are vague. I am putting out a range of six sedans, (really five, one is just for racing) and still not feeling as though I am putting out enough cars to fit the entire market. This is becomes even harder for the more specific vehicle types. For example is there room for an inexpensive luxury car, or a Rolls-Royce level micro car?

Try using the Wealth Distribution Chart and the Buyer Table Report. Next to where you enter the price of the vehicle in the Branch Distribution window is a button that has a little line chart on it. Have a vehicle selected, with a price, and click that.