If you look at history, that's what happens. The old AMC introduced the Gremlin. Soon we had the Pinto and Vega, too. Chrysler introduced the minivan. Soon everyone had a minivan. In the first case, AMC wasn't able to hold the market. In the second case, Chrysler has managed to hold it's spot as market leader in that one niche.
If enough people buy an Elio instead of a Civic, or what have you, Honda and the others will notice and react. Elio will have the advantage of defining the niche. Whether they can hold it (like Chrysler) or disappear (like AMC) will depend upon how good the first gen product is compared to the 'me toos' and how they innovate going forward. Another possibility is one of the big boys buys them out. Not many recent examples of that, unless you count GM buying Hummer.
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If enough people buy an Elio instead of a Civic, or what have you, Honda and the others will notice and react. Elio will have the advantage of defining the niche. Whether they can hold it (like Chrysler) or disappear (like AMC) will depend upon how good the first gen product is compared to the 'me toos' and how they innovate going forward. Another possibility is one of the big boys buys them out. Not many recent examples of that, unless you count GM buying Hummer.
Sent from my BN NookHD+ using Forum Fiend v1.2.10.