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It used to be that they were happy to sell small cheap cars to new buyers because it would build brand loyalty. I'm not sure people are so wedded to car compani

It used to be that they were happy to sell small cheap cars to new buyers because it would build brand loyalty. I'm not sure people are so wedded to car companies now though, especially so when so many brands are owned by a handful of companies. Small cheap cars have been disappearing from the ranges of most manufacturers.

win311fwg 3mo ago
Manufacturers were also in competition with the used market. A small, cheap car was there to try and attract budget-conscious buyers towards something new instead of something used. But then COVID shutdowns interrupted the supply of cars. At one point, used cars were selling for more than equivalent new models. That allowed manufacturers to crank up the price of new vehicles, which has had the knock-on effect of reducing how many vehicles make it onto the used market even now that production capacity is back to normal, which continues to allow these escalated prices. Lather, rinse, repeat. Auto executives have not been shy about proclaiming that they have no interest in returning to a volume-based business. They eventually might have no choice, especially with Chinese manufacturers starting to make inroads, but for now they do believe they are better off with higher margins and fewer customers. As long as the USA remains the car bread and butter with a political climate that keeps out the competition they can hold out for a while. The risk of not offering a small, cheap car now is not buyers going to another brand, but buyers giving up on the idea of car ownership entirely and finding an alternative. Once they've become accustomed to other modes of transportation, they aren't apt to come back to owning a car. That is going to be a harsh realization when manufacturers are forced to compete on volume again. But, hey, current executives will have moved on by that point and the next guy can take the blame.

win311fwg 3mo ago

Manufacturers were also in competition with the used market. A small, cheap car was there to try and attract budget-conscious buyers towards something new instead of something used. But then COVID shutdowns interrupted the supply of cars. At one point, used cars were selling for more than equivalent new models. That allowed manufacturers to crank up the price of new vehicles, which has had the knock-on effect of reducing how many vehicles make it onto the used market even now that production capacity is back to normal, which continues to allow these escalated prices. Lather, rinse, repeat. Auto executives have not been shy about proclaiming that they have no interest in returning to a volume-based business. They eventually might have no choice, especially with Chinese manufacturers starting to make inroads, but for now they do believe they are better off with higher margins and fewer customers. As long as the USA remains the car bread and butter with a political climate that keeps out the competition they can hold out for a while. The risk of not offering a small, cheap car now is not buyers going to another brand, but buyers giving up on the idea of car ownership entirely and finding an alternative. Once they've become accustomed to other modes of transportation, they aren't apt to come back to owning a car. That is going to be a harsh realization when manufacturers are forced to compete on volume again. But, hey, current executives will have moved on by that point and the next guy can take the blame.