It would be if it was true, but it’s bullshit. Pre-COVID, it was common for many dealer brands to discount 10-15% off MSRP, sometimes 20%, and still make money on each vehicle sold. And that’s not counting the manufacturer profit that is already baked into that as well.
As another example, Tesla’s margins used to be around 30-35% per car, but now are a bit under 20% average from what I remember. Nobody is selling shit at MSRP and only making $200, that’s just nonsense.
Cars that normal people can afford have thin margins.
The fat pandemic days of product scarcity and low interest rates are gone. Cheap cars will be back, but not without a lot of kicking and screaming first.
You’d think they could make a decent profit on a bare bones electric car once they go more mainstream. Just an electric motor, stereo and power windows and the basic safety features. Don’t need all the other fancy stuff.
But that would undercut their argument that no one wants them and that regulators should give them a break. Don’t worry, the Chinese will find a way into the market eventually and offer them.
Nobody buys bare bones cars, at least in the states. The value proposition just isn’t there. Most people will go used as the feature set is better for your money.
“bare bones cars” is one of the memes on this subreddit, along with “le manuel wagon”. Nobody wants them, that’s why they don’t make them.
Yeah for petrol cars. Electric is new and soon to take over and probably has lots of people who can’t afford expensive new electric cars that would take a bare bones electric one that was comfortable and offered cheap running cost over a second hand petrol/diesel car instead. It just has to be priced appropriately
Absolutely. If it costs Ford 10k to build a car, msrp is 20k, dealers should be getting these things for like 16k to sell for the 20.
Or manufacturers just need to supply the inventory for free and allocate a base sales commission for units sold.
Lmao, a car with 20k MSRP has a margin of like $200. In no world is there a 10k profit margin on a 20k car.
Tesla makes like $9k per car they sell.
That’s just depressing.
It would be if it was true, but it’s bullshit. Pre-COVID, it was common for many dealer brands to discount 10-15% off MSRP, sometimes 20%, and still make money on each vehicle sold. And that’s not counting the manufacturer profit that is already baked into that as well.
As another example, Tesla’s margins used to be around 30-35% per car, but now are a bit under 20% average from what I remember. Nobody is selling shit at MSRP and only making $200, that’s just nonsense.
If the MSRP is 20k, Ford is probably making $800/unit and the dealer is making $400. Unless the dealer can sell it for 25k…
Unfortunately, this is true.
Cars that normal people can afford have thin margins.
The fat pandemic days of product scarcity and low interest rates are gone. Cheap cars will be back, but not without a lot of kicking and screaming first.
Yes, but they make their money on financing and service.
Oh, I agree. I can only afford cheap cars myself. (Happy Honda Fit owner).
But I also understand how low interest rates and fat pandemic-era profits gave automakers an excuse to chop the affordable products off their lineups.
You’d think they could make a decent profit on a bare bones electric car once they go more mainstream. Just an electric motor, stereo and power windows and the basic safety features. Don’t need all the other fancy stuff.
But that would undercut their argument that no one wants them and that regulators should give them a break. Don’t worry, the Chinese will find a way into the market eventually and offer them.
That will not sell. People buying new cars are not people on a super budget who will be continuing to buy used economy cars.
Nobody buys bare bones cars, at least in the states. The value proposition just isn’t there. Most people will go used as the feature set is better for your money.
“bare bones cars” is one of the memes on this subreddit, along with “le manuel wagon”. Nobody wants them, that’s why they don’t make them.
Yeah for petrol cars. Electric is new and soon to take over and probably has lots of people who can’t afford expensive new electric cars that would take a bare bones electric one that was comfortable and offered cheap running cost over a second hand petrol/diesel car instead. It just has to be priced appropriately