[tgaj]

To match the offer to the market - if the base engine is more powerful than the market standard at a given price then you can lower the power because the customer will not choose another car on that basis anyway. And you can take more money from enthusiasts.

[lurk2]

So if I’m understanding you correctly, the play here is:

1) Build engine with $market_leading_horsepower.

2) Throttle engine so that base models of a car have $market_leading_horsepower - $throttle_amount.

3) Price discrimination for enthusiasts removes the throttling back to the original $market_leading_horsepower while also saving the effort of having to design a faster engine.

Is there no extra cost associated with machining the faster engine? That is, would manufacturing a slower engine for the base model not be any cheaper than just building the fastest engine they can into all models?

[sbarre]

> Is there no extra cost associated with machining the faster engine?

There probably is but it's much less than the cost of having different engines for different performance specs of the same model of car (which is very common).

[barrkel]

Done right, a more powerful engine needs uprating of a bunch of other components - clutch, brakes, suspension, tyre profile, cooling, exhaust, air intake and so on. Almost certainly not a big deal with a 10% bump, but if it was a big bump, costs could be saved elsewhere in a less powerful vehicle.