While other answers have touched on some of the reasons for this, another one I always assumed is that the econ-o-box car will sell in far greater volume than t

While other answers have touched on some of the reasons for this, another one I always assumed is that the econ-o-box car will sell in far greater volume than the luxury car, meaning costs of R&D can be spread over more cars. I would guess a Honda Civic actually has way more $ in R&D spent on developing it than a new Ferrari, or even a relatively common luxury like a Porsche. Someone correct me if that's wrong.