You’re absolutely correct. All automakers have abandoned small cheap cars because they don’t actually cost that much less to manufacture than massive tank-cars.
Imaginary example to illustrate this:
Car A: small hatchback with basic cloth seats, 50KWh battery, standard satnav/stereo system. With $2000 of materials, $10,000 of manufacturing and labour, and a sale price of $20,000, for a profit of $8000.
Car B: SUV shaped faux-luxury car with leather seats, 80KWh battery, the same stereo, and fake wood and chrome covered plastic all over it. $3000 raw materials, $15,000 of manufacturing and labour, but it sells for $65,000, this automaker gets a profit of $47,000!
It’s easy to see why they’re doing this. By making their cars enormous and expensive but with long financing terms they can create “mandatory luxury”.
You’re absolutely correct. All automakers have abandoned small cheap cars because they don’t actually cost that much less to manufacture than massive tank-cars.
Imaginary example to illustrate this:
Car A: small hatchback with basic cloth seats, 50KWh battery, standard satnav/stereo system. With $2000 of materials, $10,000 of manufacturing and labour, and a sale price of $20,000, for a profit of $8000.
Car B: SUV shaped faux-luxury car with leather seats, 80KWh battery, the same stereo, and fake wood and chrome covered plastic all over it. $3000 raw materials, $15,000 of manufacturing and labour, but it sells for $65,000, this automaker gets a profit of $47,000!
It’s easy to see why they’re doing this. By making their cars enormous and expensive but with long financing terms they can create “mandatory luxury”.
i want the toyota IQ back!
A smart-sized car that lasts a toyota amount of time and has like 70HP stock. literally one of my dream cars.