Generally speaking gas/diesel engines are used across several models, mass market manufacturers aren't making bespoke engines for one specific vehicle trim that isn't used elsewhere. The overall direction is further standardization of platforms (esp with electric vehicles) but large companies like Toyota, Ford, etc. are going to have a variety of engines available for engineers to slot into vehicles to handle different use cases. I'm not terribly interested in counting but here's some examples of the variety:
https://en.wikipedia.org/wiki/List_of_Toyota_engines
https://en.wikipedia.org/wiki/List_of_Ford_engines
> I'm not in the automotive industry, so I don't know all the details, and I might be wrong on the above reasoning, but this is what I got from it.
I'm sorry but your speculation is pretty far off base and isn't based in fact.
So you claim VW is not selling the same engine to different market segments, and limiting it through software?
If they do, why are they doing it?
In a competitive market they wouldn't be able to get away with either of those. Multiple companies that know how to make their lower end models better for free would do it, because they want more market share.
So we need to figure out how to get as close to that state as possible.
Also the proposed law wouldn't make multiple prices illegal.
If you don't understand this, there is no point in discussing this further.
What was unclear about "the proposed law wouldn't make multiple prices illegal"
As for what would happen in a competitive market with everyone acting in their best interest, I'm not sure what exactly would happen. But they're allowed to have multiple prices. It's not the prices causing the problems. And there are other ways to distinguish products that aren't artificial limits.
I don't agree with this. Let's say they make 2 engines, one normal one and one powerful one. Customer pay different price points.
Now it turns out that making 2 different engines is actually pretty wasteful, and it's way more efficient to make 1 engine, and limit the possibilities for the lower price point (this is already happening).
Now you come along and say "Illegal!". Now they have to sell this engine at the same price, which doesn't make sense in the market. So they are back to the inefficient way of producing 2 different engines for 2 different markets.
Calling this "wasteful" is weird in my eyes.
I'm not in the automotive industry, so I don't know all the details, and I might be wrong on the above reasoning, but this is what I got from it.
1 engine production line, serving 2 different price points.