[jogjayr]

Money quote:

“As automakers were profit maximizing during the supply chain crisis era, you are going to prioritize the bigger vehicles, the more expensive vehicles with their higher margins,” Tyson Jominy, vice president of data and analytics at J.D. Power, told me. “Now we just don’t have” these cheaper models.

[lenerdenator]

Ding ding ding.

We have a winner.

There's a bunch of free riders in the form of shareholders artificially driving up the price of goods.

[Cumpiler69]

>There's a bunch of free riders in the form of shareholders artificially driving up the price of goods.

Isn't this a natural consequence of capitalism in entrenched industries?

[lenerdenator]

Why yes. Yes it is.

Which is why you don't put shareholders first in line for revenues.

[achierius]

Yeah, I think that's the point they were trying to make.

[packetlost]

You also leave out the emissions exceptions for vehicles above a certain size, which also incentivizes manufacturers to build and sell larger vehicles.

[FergusArgyll]

Why did they just start "maximizing profit" recently?

Did all the bad bad no good CEO's just read The Prince or something?

[kjkjadksj]

Look at fords lineup now. No sedan. Its straight up embarrasing if you are the first lemming to start burning furniture to save on heat. But if the entire industry has been doing just this since 2008 then you are the fool for not playing the game your investors expect from you. Never mind how you might fare 10 years from now. Quarterly thinking dominates.

[bluGill]

They started long ago. Ford himself was doing that. However what makes for maximum profit has changed over time. As cars last longer more and more people are not buying new cars so they have to make cars for the people left. If you want me to buy a new car it needs to be cheap - my 25 year old truck is paid off and still runs fine.

[acdha]

They’ve done it for ages but there were market constraints. The pandemic broke that in two key ways: the first was the chip shortage they accidentally created by breaking their supply contracts early on but the second was because so many people stopped using transit. That created a demand spike at the same time supply was limited, which they capitalized on by prioritizing the most expensive models for production since they knew many buyers would feel they had no ability to negotiate.

Higher interest rates and other inflation caused by profit-taking in other industries drove this to a head since consumers couldn’t just soak it up, but none of the manufacturers wants to be the first to lower their margins.

[mobilene]

This. Yep, automakers have deliberately gone after higher profit margins per vehicle. Huge-volume, lower-cost cars are slowly going away. Get one while you can, if that's your thing.

[engineer_22]

US Congress has mandated a growing list of advanced features, leading to complex vehicles, complex supply chains, and higher sticker prices.

[asadotzler]

If that were true, you wouldn't be able to buy multiple vehicles for under $18,000, which would have been a $10,000 vehicle at the turn of the century. How many $10,000 cars do you remember from 2000? I was in the market for my 3rd car by then and I can tell you the answer was zero. Cars are actually cheaper today than they've ever been DESPITE the increased safety and emissions features and you are exactly wrong in your claim.

The fact that most cars are priced at $60K doesn't mean cars cost that much to make, it means that the US car makers have decided to stop caring about poor people, leaving them to the used market while they go luxury, chasing ever higher margins from a smaller and smaller but ever-wealthier consumer.

Again, if safety or emissions requirements drove up prices, how is it legal for Nissan, Mitsubishi, Kia/Hundai and others to sell cars that cost under $10K in 2000 dollars when you couldn't buy new in 2000 for anywhere close to that? Just because Ford and GM WONT compete there doesn't mean competing there is cost prohibitive.

[engineer_22]

You are very passionate about retail car prices.

[achierius]

It's the biggest purchase most people make in their lives (and on a regular basis to boot), aside from real estate. Not the worst thing to be passionate about.

[kjkjadksj]

Nissan has figured out how to comply and sell a Versa for just $17k like its 15 years ago still.

[Iulioh]

That's not the problem there.

[engineer_22]

OK