... when Union Glashütte produced watches with more or less the same movements as Glashütte Original (Union cal. 26 and GO cal. 39), but Union's movements were machine finished, and lacked the swan-neck regulation, compared to the hand finish (except the rotor stripes) on the GO movements.
The Union watches were practically a bargain, and yet they did not sell very well. Only since Union uses Swiss ETA movements (and lowered their prices accordingly), the sales are said to be satisfactory.
It appears that even with the logistic assistance of a "big brother", you cannot offer good inhouse movements at a price lower than Xmin. The majority of buyers able to pay Xmin will then readily pay > Xmin to get the "real thing", and for the others, even Xmin is too expensive.
If ones takes into account the cost created by the need to have two different manufacturing lines (machine and hand finish), which artificially raises the cost for both, I do not think it makes sense to offer it.
Similar, but different still is Chopard's approach to offer a high-end line (LUC), and a completely different, machine-finished movement made in an own facility (cal. 01.01).
Regards,
Marcus