And yet automakers think that the smaller more affordable cars that do well overseas somehow have no audience in the US.
For instance, the Geome Xingyuan is $10k, Hongguang Mini EV is $5k.
Instead we have the average cost of a new car at $50k.
For instance, the Geome Xingyuan is $10k, Hongguang Mini EV is $5k.
Instead we have the average cost of a new car at $50k.
Blame fleet efficiency standards [1] and the light-truck loophole [2].
[1] https://me.engin.umich.edu/news-events/news/cafe-standards-c...
[2] https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?artic...
Many things are more affordable overseas.... aVW ID.3 is 15k eur in china, 32k over here in my small eu country.
They sold well because you could get a Civic or whatever with a nice radio and they had a bunch of them on the lot in automatic and all the other things buyers cared about beyond just A to B because for the Japanese automakers shit was serious business and so they built their shit with some give-a-fucks included whereas to the Americans shit was a sideshow and they phoned it in and it was like pulling teeth to get a well optioned domestic that wasn't hobbled by the lack of some key feature or ergonomics issue.
None of these were cars people wanted to be driving. The market for big nice fuel hogs shrunk and the market for compacts rose in it's place and the Japanese were very well positioned to put their ass in that seat when the music stopped.
People sell things based on their perception of future consumer sentiments, calculated margins, defensible moats, lots of things.
If someone wanted a compact sedan but the only thing for sale was SUVs, they aren't going to be like "I refuse! Bus pass for me" no. They will just bite the bullet and purchase the SUV.
Then the analysis will say "well people are buying the SUV! It looks very popular we should make more of them! I told you sedans were a bad idea!"
The supply and demand economics 101 ways of thinking are for fools and simpletons. It's why the iPhone wasn't a BlackBerry knockoff
I mean look at Hyundai's ev line up. I drive a kona because it's the cheapest. The next most expensive car is the 5 and then their most expensive (up until recently) was also their smallest! The 6.
It's like twice the price and at the end of the day I just wanted to drive electric so I got the cheaper one.
But if the ioniq 2 had a US release I'd be on top of that real quick
The auto industry would rather use its limited assembly line capacity for the highest margin products, which are large luxury internal combustion vehicles.
We have long been in the era of lean manufacturing, where assets like factories are hyper-optimized for returns to capital, not for making products to serve all needs or desires. Why lower your gross margins by investing in more factory capacity to make affordable cars? You'd rather put your capital into the Mag-7 to get a higher rate of return.
It also makes sense because with growing inequality in the US, the well-off (or the financially irresponsible) are the only people who buy new cars anyways, so the manufacturers make cars for them.
This is also a big part of the reason they make EVs (which are disproportionately higher end or luxury): because they know that EV buyers are likely to be more well off. The environmental benefits are secondary, and the auto industry has never cared much about lowering TCO or energy costs (those things benefit the EV driver, not the car manufacturer).
(joking, but not as much as I want to be)
I'm not saying it's good or bad, it just is, and car companies don't exist to make affordable new products for everyone. "Obese" manufacturing won't result in more affordable cars either, not while housing, education and healthcare continue to eat away at Americans' stagnant income growth.
If affordable transportation is the goal, we probably need to get past personal car ownership.