Touchscreens are more expensive than buttons and knobs. But screens are required by law in the USA and EU as they require backup cameras. And a digitizer is a lot cheaper than some buttons and knobs.
My presumption is you meant cheaper?
Making the screen into a touch screen with a digitizer is cheaper than buttons and knobs.
So if you already have a screen, making it a touchscreen is indeed cheaper.
Wiring in a set of buttons and knobs costs more than a small screen. The buttons and knobs are more ergonomic. The real answer to the above question is that it’s happening already. All new cheap Chinese (or anywhere else that caters to the developing world) made cars have a touch screen and fewer hardwired controls.