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They are also forced to by market realities (which you bring up). They can't just ratchet up the prices to where they would get the same margin as for an SUV. B

They are also forced to by market realities (which you bring up). They can't just ratchet up the prices to where they would get the same margin as for an SUV. But many people can't afford that. The big 3 made a conscious decision to get rid of their cars because they constantly had to do incentives to make them sell. Compare and contrast to the Japanese makers who tend to be less likely to do so. IMO they weren't selling as many fits as they wanted, and my gut also tells me the new trade agreement may have had an impact (I will admit I haven't dug into it and checked the foreign content and if it would be out of range.) Heck, Subaru actually moved their US Impreza production to be domestic. If a few players stick to the car market for a while I feel like they will be rewarded for doing so. Not everyone wants the extra cost of an SUV.

PaulHoule 6y ago
Really? When I go to a "car" dealer it seems the cars are all sold out but they have a long line of SUVs on deep discounts. My dad would go to American car dealerships in the 1970s and they would refuse to sell him a small car. Every time I've been in an American car dealership since it has been the same story except for a small window after 2008 when you might find a small car. Last time I went to a Honda dealership the Fits were all sold out because the factory washed out but they had plenty of CR-Vs made in the same factory.
- valuearb 6y ago
  US manufacturers can’t make small cars profitably with their labor costs, but are required to sell them because of CAFE. They are only going to make enough to reduce their CAFE costs, no more.
  - PaulHoule 6y ago
    Right. So I am sick and tired of the media repeating that "Americans don't want to buy small cars" when the fact is that "American car manufacturers don't want to sell small cars."
valuearb 6y ago
The problem is the big three have massive pension costs inflating their assembly costs. For them, it makes perfect sense to focus on larger cars, SUVs and trucks where cost of assembly is way lower proportion of sales costs.

PaulHoule 6y ago

Really? When I go to a "car" dealer it seems the cars are all sold out but they have a long line of SUVs on deep discounts. My dad would go to American car dealerships in the 1970s and they would refuse to sell him a small car. Every time I've been in an American car dealership since it has been the same story except for a small window after 2008 when you might find a small car. Last time I went to a Honda dealership the Fits were all sold out because the factory washed out but they had plenty of CR-Vs made in the same factory.

valuearb 6y ago
US manufacturers can’t make small cars profitably with their labor costs, but are required to sell them because of CAFE. They are only going to make enough to reduce their CAFE costs, no more.
- PaulHoule 6y ago
  Right. So I am sick and tired of the media repeating that "Americans don't want to buy small cars" when the fact is that "American car manufacturers don't want to sell small cars."

valuearb 6y ago

The problem is the big three have massive pension costs inflating their assembly costs. For them, it makes perfect sense to focus on larger cars, SUVs and trucks where cost of assembly is way lower proportion of sales costs.