Personally, I don't think we'd be pricing out at what the OP said his competitor did, but to get one's foot in the door, it sometime pays to go in lean, do a great job and slowly raise your prices. Who knows, maybe it was an introductory price for a few vehicles and then he'll return to normal pricing. It's hard to say, but what's it matter, if you lost the contract ??
We've lost bids and contracts to lowballers. It's just the way the cookie crumbles these days. Like Jill said, the trade has become numb to the idea of making a good living and just get every job you can at whatever cost.
We were just awarded a contract today for a quote from Tuesday, where I did exactly the opposite. We are so busy, I priced it out high, added quite a bit on top, kept adding more, until I thought, well, if they want us, they're gonna pay out the wazoo. Got the e-mail this morning, picked up the deposit and it's due around the middle of December. We had to be much higher than anyone else. I just know it. Go figure. Now, we just have to find the time to get it done.