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Agreed - more Posted by Justin VanAbrahams [Email] (#32) [Profile/Gallery] (more from Justin VanAbrahams) on Thu, 30 Jan 2003 19:20:27 In Reply to: Re: no no no, Rick D., Thu, 30 Jan 2003 18:40:52 Members do not see ads below this line. - Help Keep This Site Online - Signup |
This is absolutely true. All statistical data shows that the domestic car makers lose money over the lifecycle of a small car. That's not saying they lose money, per se, on each model sold, but rather that the cost of developing, marketing, tooling and building of a small car exceeds the total revenue gained from actually selling it. Some get closer than others, but few models actually come out with a gain.
The problem is that, for the most part, a Cavalier costs as much to design and build as an Impala. Just because it's smaller doesn't mean there is less technology or fewer design considerations than a bigger car. By and large, these costs are effectively fixed and the only thing cheaper about a small car is that it takes less metal, and that isn't a huge cost savings.
I suspect this is probably different with foreign manufacturers who probably sell more small cars as a percentage than American manufacturers. There are a ton of Civics sold here, and even more worldwide. Honda has a better chance to recoup their investment. The Big 3, however, have enough trouble selling competitive small cars here and have REAL trouble selling them overseas. They sell them because they have to in order to get more people into the dealership, and not because they are a big profit center. That, unfortunately, are trucks. For some reason Americans feel alright paying more money for technologically inferior products just because they're bigger. How funny!
-Justin
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