Coates International Ltd. (fka COTE)

[stay long]

mogman and medcac, I believe you are both right in your thinking.

I agree that George should continue to focus on selling the CSRV larger gen set applications to large industries and to the oil patch because those are the easiest markets to penetrate at this time. There is less resistance in selling directly to the end customer who will reap immediate benefits from the CSRV technology.

Penetrating any existing engine manufacturing market, including the car industry and parts makers as a whole will not be easy. Why? Because a high percentage of their profit margin comes from the mark up of the engine parts that the CSRV will replace and from the after-the-sale maintenance fees and after market parts sales. Those companies will not want to give up that income. Reason? How much did you pay for parts on your last auto repair? These businesses have boat loads of money tied up in parts inventory that the CSRV would render obsolete and cause their customer base for these small parts to gradually die out.

IMO, the best way to penetrate the small engine market is for an existing major car manufacturer to form a new division to incorporate the Coates CSRV technology into their cars with exclusive rights to sell them. In fact, I predict this will be George’s approach.

Stay long and strong.