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It's really weird how they just gave up on making low cost cars.
by maximus-decimus 3y ago
It's really weird how they just gave up on making low cost cars.
- floxy 3y agoIs this still a knock on effect from pandemic supply chain issues? If you only had a limited supply of integrated circuits, it probably made more sense to build the more expensive cars?
- maximus-decimus 3y agoProbably doesn't help, but they started killing small cheap cars in North America even before COVID. Examples are the Toyota Yaris (which was a rebadged Mazda 2) and the Honda Fit.
- acdha 3y agoThat’s what I read in a comment here: they tried to jerk their suppliers around and lost. If you can only get so many chips it makes a lot of sense to put them in the SUVs and trucks with 40% profit margins rather than cars with half the margin on a lower base price. https://news.ycombinator.com/item?id=26931498 https://news.ycombinator.com/item?id=26931498
- floxy 3y agoEven if the high-end vehicles have lower margin, it could still be smarter to focus on the higher cost vehicles to the maximize revenue / profit if you are production constrained. (i.e. 30% of $40,000 = $12,000 vs, 50% of $20,000 = $10,000)
- acdha 3y agoOh, sure. It’s just in this case the ratios are reversed so I find it completely unsurprising that the makers and dealers are acting in their own financial interest. The average pickup is $60k so they’re probably making well over twice as much on each sale as well as locking in higher maintenance revenue.
- underseacables 3y agoInflation, unions, a lot of things are pushing prices up for auto companies and so they feel probably that they need to sell more expensive vehicles to keep the profit levels up.