1. Economies of scale are the only way to build a budget car.
2. The incremental costs of adding features are nearly zero. The vast majority of price comes from the basic costs of building a legal vehicle.
3. Buyers generally won't reject a car for having features they don't care about, but they'll frequently reject a car for lacking a feature they deem important.
4. Buyers have different preferences.
In order to sell at a low price, automakers have to sell as many as possible to hit massive economies of scale. In order to sell that many, they need to please a huge number of buyers, which means they add a whole bunch of cheap features to satisfy as many buyers as they can without cannibalizing their higher-tier offerings.
The other side of this is the price point that western OEMs can actually hit with economies of scale has climbed significantly in recently decades, in part due to inflation / wage pressures, but mainly due to massive institutional inefficiencies. Mary Barra's compensation alone adds several dollars to the price of each GM vehicle. Legally mandated dealer margins and fees add tens of percent to the price that consumers pay. The inefficiencies of spreading production for tax purposes across state and international borders adds more cost. So on and so forth, and the market feedback mechanisms to correct these issues are intentionally hampered by policy decisions to favor the current status quo.
Change in the market needs support at the regulatory level.
Petroleum is a critical resource and most countries manage its use in automobiles for fuel in a fairly direct way: They tax the living shit out of gasoline and diesel. If you use more, you pay more. You have incentive to buy a smaller, more basic car because they will ultimately cost you less.
But not here. We gave exceptions on light trucks because that's all the big three could competently produce back when fuel economy standards were being introduced and we were getting our brains beaten in by the Japanese. Making more fuel-efficient vehicles requires R&D, and R&D spend is money not sent to a shareholder. Since the bigger vehicles don't count towards CAFE and smaller vehicles do, guess which vehicles the big three push harder to consumers?
Gas in Vallejo is about $4.09 / gal, versus $3.49 (according to GasBuddy.com).
The average house in Vallejo is about $539,000, versus Wheeling at about $307,000 (according to Zillow)
The "minimum annual income to live comfortably" in Vallejo is $96,120, versus $46,080 in Wheeling (according to BestPlaces.net). Side note: crime in Wheeling is significantly lower than Vallejo.
These places were chosen essentially at random, but meant to be comparable, and the differences are pretty stark. Houses are slightly less than twice as expensive in Vallejo, but the cost of living is more than twice as expensive by a comfortable margin. In terms of living costs, for them to be comparable, Vallejo's gas would need to be a little over $7 / gal, just for you to start seeing meaningful effects.
TL;DR - California's gas taxes are basically meaningless when it comes to guiding buyers' decisions.
> 3. Buyers generally won't reject a car for having features they don't care about, but they'll frequently reject a car for lacking a feature they deem important.
4. Buyers have different preferences.
If you buy a new car, you're already paying a premium. If you're willing to pay a premium, you were probably not looking for a basic model in the first place.
I'll buy a new phone for the fun of it. Not a new car. So don't put a tablet in my car :)
Sadly, I'd suspect a tablet is actually cheaper than physical buttons.
Only way then to increase revenue is to sell more car.
Indeed. Aside from price, this is why I will never own a new car, or anything newer than roughly 2015 or so (depends on manufacturer). A car must absolutely not have any internet phone-home spyware connectivity.
I don't know what business car manufacturers think they're in. Finance? Data brokers? Social media? Someone needs to get back to making cars.
So they don’t need car data. My car maker does not sell its data nor does it link car locations with car owners. Although it could do so, but not without some bad PR or legal risks of doing it secretly after having made assurances that it doesn’t do it.
But that gets back to who would buy it? Nobody. They already have all the data they need from phones.
All car manufacturers are extremely vague about what data they are sending, but you can assume it's basically everything: GPS location, speed, engine and maintenance data, control inputs (accelerator, brake, light switches), even seat occupancy. (Yep, mine has seat sensors for that.)
I spent several hours researching how to disable this thing and there is very little information on doing so for my exact year/model. What little info I did find says there's no easy and simple way. The fuse for it powers several other things. There is a module you can disconnect somewhere deep in the dash, but you lose other functionality like Bluetooth. And the car will probably constantly warn you about a failed module and turn your check engine light on.
My best guess right now is to find out where cell antenna is and bridge it with a 50-ohm resistor. (But that is not necessarily bulletproof either as dummy loads can still transmit, just with greatly reduced output.)
I have read that car manufacturers make these systems intentionally hard to disable because each one is a perpetual stream of income for them for as long as the car is on the road: They sell the data to data brokers who then re-sell it to insurers and various other customer profiling companies.
According to my Vehicle Privacy Support (https://vehicleprivacyreport.com), LexisNexis is the data broker that Toyota uses. I submitted Consumer Disclosure Report with them and 6 weeks later, a snail-mail letter arrived saying they were not going to disclose any of my information to me.
What legal recourse would you have? They've got data on you, you'd think that at the very least they would be obligated to show it to you for a reasonable price.
See e.g. https://sandsprite.com/blogs/index.php?uid=7&pid=462&year=20...
It also kills a very important safety feature, the one that auto-calls 911/112/999/... when you get into an accident.
After all the niceties and "no, I hadn't been in an accident", I was afraid to touch the mirror after that.
They say they want one thing, but buy another.
They claim they want a manual transmission and then buy a RAV4.
They claim they want a sports sedan and then buy a RAV4.
They claim they want a station wagon and then buy a RAV4.
They claim they want a base, cheap, simple, vehicle and then they drop $55k on a fully-equipped RAV4 Hybrid.
Be weird. It's ok. Do the dumb thing and follow your desire.
And you can hedge your bets. I bought, used, a manual transmission convertible sports car, a sports sedan (red, even!), and capacious station wagon for all of my Home Depot needs all for less than the price of RAV4 Hybrid and between the three I always have at least one functional vehicle!
These studies should be surveying these groups instead of individuals I think. Sometimes the "group" will just be one person, and that's okay. But I wouldn't want someone's opinion if they're making it on behalf of a group without the groups input, because that's not realistic
So they went out and built a 2dr jeep with a shitty 2nd row so people can pretend like it's optimized for people hauling and sell the "lifestyle car" they really wanted to their SO. They retained the soft top and manual at non-insignificant cost to appeal to additional swaths of buyers and then added a hybrid option as a checkbox exercise.
It's kind of beautiful if you think about it.
https://www.forbes.com/sites/michaelharley/2023/08/30/2023-j...
Anecdotal, but I've also noticed way more 4 door new Broncos and new Defenders around than the 2 doors
Can't recommend enough this approach of multiple older cars. Between the extremely high cost and steep depreciation new cars make no sense unless you're so rich money is not a consideration.
I have multiple sports cars (all over 30 years old), a truck for towing and utility (over 20 years old), a minivan for kid and family duty (~15 years old). All that together is cheaper than a single new car. And having bought them depreciated, the value barely goes down. In fact a couple of the sports cars are appreciating now, worth more than my cost.
In many countries that's unaffordable. In the UK I pay £350 per year car tax, £480 insurance and £50 mandatory roadworthiness testing. Best part of a grand before I've even driven a mile - and the UK is considered cheap in Europe. In Ireland the tax alone would be over £1000.
My partner pays about the same for her 20 year old petrol Honda SUV. Ironically if she chose the filthy, carcinogen-spewing diesel model she'd pay just £40 in tax, so it's little wonder that people compromise.
Seven but we have 3 drivers. Cars are 1961-2011 and 63, 96 & 2011 are current daily drivers. Every so often something under 40k mi shows up on FB marketplace under $2k and we grab it.
Our car insurance includes a $200/mo FU charge for living in FL. We're at no risk of flooding and carry liability-only. The forever-skyrocketing costs of repairing other drivers' new cars - this is a force multiplier on our premium costs.
Not awesome stuff about older vehicles: No cruise control on most of them(sigh). Higher gas consumption on the 61 and 69. The 69 does 130mph at low rpm and needs to go away. The 61 has fewer driving days because droptop. Can't see around pointlessly oversized vehicles.
It's a Wash: 30mpg from 63, 92, 96 and 2011 (89 not on road yet). Repair/Service time varies wildly on new models and is hard to compare to ours (we are 2hrs/mo)(more when tinkering for fun).
bfciia: References behavior formerly clustered in intentional aholes (but now mandated for millions of [mostly] unwilling drivers).
It helps that I haven't had a claim in 30 years.
I think also in life your opening line can be generalized to:
It has been my experience that people .. are lying to themselves.
More people naturally want a RAV4 than a manual station wagon, but the automakers would prefer that even the folks leaning towards the manual station wagon leave the dealership with a RAV4 so they can just make the RAV4. So manufacturers offer nicer features it would make sense to offer in any vehicle exclusively in models they want to steer customers towards, like nicer seats, better sound systems, advanced safety features, etc. Subaru sells both the Impreza hatchback and the Crosstrek, which is literally just a lifted Impreza. But if you want non-cloth seats, roof rails, or even a spare tire, your only option is the Crosstrek. The conclusion that everyone wants crossovers is driven in no small part by the fact that buying a crossover is often the only way to get features customers want that should be, but are not, model agnostic.
They present it as a choice between manual or electric seats, manual or electric buttons, etc., which are indeed valid items of discussion ..
But what about other expensive, complicated, things I want a choice to get rid of, major things I don't want to pay for, like .. auto stop-start, or the ability for the car to slam on the brakes by itself, or the ability for the car to decide to steer itself if it thinks I've strayed from the middle of the lane. Heck, I don't want a rear camera or blind spot monitoring, I'll check my blind spots myself. They're even working on mandating some sort of monitoring in the next few years to "detect" whether you might be drunk.
What are the costs of all those sorts of things? All the sensors? All the computers? All the design/coding? The costs for maintaining all of it? The cost of the extra complexity? No mention of any of that?
(Also don't get me started on the extra cost and complexity and loss of maintainability that emissions regulations have added to cars. They used to be dead simple and maintainable.)
There's a cost attached to them, but it was decided that that cost is worth the significant benefits in road safety for both the people in the vehicle and the people around the vehicle.
Emission regulations have reduced the cost of cars, if you count the health and environmental cost that manufacturers and drivers simply externalized onto the pulic.
Yes, it became more expensive for the polluter, but rightfully so.
Depends. The rearview camera thing? Probably not that expensive at this point; development costs have been amortized. Sensors probably are a bit more expensive.
The thing that chaps my ass about it is that there's so little commonality among parts between models and makers. We're 40+ years into the microprocessor revolution and ECMs are still mostly bespoke designs that have closed code running on them. Why? One way to deal with the design/coding costs would be to simply spread it across more automotive manufacturers, because at the end of the day, most of them are trying to achieve the same goals with regards to the function of the component. It's like looking at the different lug nut patterns between automakers... there's only so many ways to mount a wheel on a hub and you could reduce the tooling cost to make those wheels if you shared it with someone else.
> (Also don't get me started on the extra cost and complexity and loss of maintainability that emissions regulations have added to cars. They used to be dead simple and maintainable.)
It's nice to have breathable air, no?
Most of the things you listed are both a good idea and legally required.
The keyboard you typed your message had a cost, yet apparently that was worthwhile so that all of us could contemplate your points.
The complex ones do.
You can get John Q. Public to buy a basic, efficient, safe compact car with cloth seats... or you can use that same production line to build a full-sized truck with tons of non-essential electronics that costs three times as much, which then requires the buyer to take out a loan from your financial arm for 84 months.
Which one returns more value to the shareholders?
EDIT: "non-essential electronics" should be seen as huge displays and the like, not things like emissions controls or safety equipment.
> Which one returns more value to the shareholders?
I think the 'shareholder primacy' era of American capitalism has had some particularly dumb and bad effects... unfortunately I can't change that just by being angry and anxious about it. The market loves tech companies right now, which really distorts the valuation of other companies.
I think that people still vastly underestimate how difficult it is to make a physical product, how much time and attention it takes.
I saw a presentation for assembling the Chevy Cruze in Lordstown, Ohio. There was a planned market size, production volume, etc, etc. The closest it got to the estimates (if I recall correctly) was about 1/2 to 2/3 the planned production volume. After the first couple of years of production, volume dropped more.
At 1/2 volume, the plant would never make money. The fixed costs simply eat too far into revenue. The lower the volume, the longer it takes to pay off things like engineering costs - not just for the OEM (GM, Ford, etc), but also for the suppliers. Suppliers often book substantial losses for the first couple years of a new product.
> Simple cars don't make money...
They really don't make money. On the very best day, a $30,000 simple car might make $1,000 net profit to the OEM, maybe another $500 to the dealer. On a median day, the initial sale might be a small loss.
Under capitalism, there is strong pressure to move upmarket. Under communism, most people never even got the simple car, and those who did get the simple car had to wait for many years.
Other countries have different power and incentive structures. In Germany, both the state and labor are represented at the ownership level. In Japan, corporate and social expectations are completely different.
Companies can also 'borrow from the future' by reducing R&D or stretching a product lifecycle from 6 years to 10 or more. Over that time, they will lose some market share as people lose enthusiasm for their product. Of course, if all the car companies had a 10 year product cycle, then consumers would pay less for engineering changes etc; but everyone has an incentive to 'defect' so they can capture more market share.
It is generally believed that competition benefits consumers overall; but there is no single system that will magically improve every metric.
If you've been satisfied with blaming an organization or a person, then an explanation can feel like an excuse, because I'm asking you to pick the problem back up again with added complexity.
Still rolling in 2005 Toyota. Fuck modern cars! Excuse my French.
But while it makes it cheaper for the manufacturer and ultimately cheaper for the buyer on the lot, it makes for much more expensive repairs. I'm looking at you Ford with your $1200 taillights.
Those are not base equipment. But yeah the price is absurd.
Which screws up the market for those who have a $10,000 budget for a car. Most of them would likely prefer a 5 year old $20,000 car than a 15 year old $50,000 car, but the market has very few of the former.
See the problem? It's right there in the quote.
Car manufacturers are in the business of making money, not cars. People that want to keep costs down are not the kind of customers they can make money from.
In fact, they would be happy if no other manufacturer would have them as customers, because that would mean those people will succeed in spending less, grow accustomed to the ideea of not having to spend a lot on a car, and possibly hijack some other customers that would have bought an expensive car.
If, let's say, a typical $30k car means a large EV SUV with all the luxury gadgets and conveniences, plus fridge, massage chair, full camping setup, etc. Would 30k car buyers not expect those things?
So in practice what happens if that if you have a family and can easily afford an SUV, you get the SUV to alleviate these painpoints,
I live off a dirt road, and if my minivan breaks, I'm not going to buy an SUV, I'm going to buy another minivan, but I will buy an AWD model instead of FWD like my current model.
I'm lucky to live somewhere where we still get tiny, cheap, practical cars https://kalleboo.com/linked/suzuki_spacia.jpg
My point is that any degree of "thing" can be enough if you accept its implications. So for example when you go on your family vacation, you make choices about what to take and what to leave. If your two year old daughter asks last minute if she can bring her scooter (and helmet), the answer might be "sorry honey no room" whereas with a larger car you could say "sure, toss it in." Or the grownup version of that, I tossed in my inflatable paddle-board, paddle, lifejackets and pump as a last minute decision for our last vacation "just in case" we want to get on the water before the kayak rental place opens up (ended up using it.) Again, the paddle-board or scooter are totally non essential - if I had a smaller car I wouldn't even consider bringing them at all and that would be totally fine, but it's nice that I can.
BTW, we got our SUV when our 1st kid was born, it was a larger car than I thought we needed but was still kinda helpful. By now we have 3 kids and the fact that "how are we gonna fit them and their stuff" isn't one of the many things we have to deal with as parents is very nice.
Again, if I couldn't afford it or was very anti-big-car, I'd find a way to make do with a smaller vehicle but it's nice to make the other choice and that's why many many many people do.
Or a small hatchback, e.g. a Fit, Golf, Matrix, Yaris, etc. They might not be the most attractive looking vehicles but darn if they aren’t practical. Better cargo space than much longer sedans while being short enough to park almost anywhere.
It’s so disappointing that they’ve disappeared from the US market almost entirely.
I got out of car culture around 25 years ago, and every time I ride someplace in a modern car I'm just bewildered by all the bullshit. Do grown adults really need to be "pampered" with heated seats? How can you stand carrying around those "fobs" in your pockets — they make jeans look ridiculous, like a person is packing two sets of their junk.
I can't imagine buying a car built after 1990.
The common arguments I hear are 1. What if I need to take a roadtrip? 2. What if I don't have accessibility to a charger at home or work and need longer range to account for that.
Only (2) seems reasonable to me, but many do have access where they live. Seeing as the huge expense of EVs is batteries, I'd love the option of something with a much, much reduced battery (and the additional reduced feature sets the article mentions).
PS: It must be a monstrosity of a generator, min. 50 KW, not the toys that some companies showed as investor bait. [1]
[1] https://gajitz.com/little-generator-trailer-lets-electric-ca...
https://www.motortrend.com/features/what-is-an-erev-extended...
It basically has everything you need, and is Long-Range, too, without having to decide whether or not you want a mutually-exclusive "technology package" or "XXX package".
Without having to decide a whole bunch of other things, too, which, if you don't get, won't give you the advertised features seen in commercials, and if you do, won't keep the advertised price of the car.
So please, could we just have that? Just because it's easy for you to add internet connectivity doesn't mean I want it. I don't want my car to rat me out to megalomaniac dictators because my car company's psychotic CEO wants a sweetheart trade deal. I don't want my car to create data trails that will allow advertisers to see places that I frequently visit, regardless if that place is an oncologist or my friendly neighborhood dominatrix. I don't want my car to know my retinal data or fingerprints, to be controllable via my phone, or to tell me that my resting heart rate is. Just give me a car, and let me do the rest on my own.
I got an almost new BMW 310GS for $5k. Even at that price it has antilock brakes, slipper clutch, throttle-by-wire. Any idiot could ride this bike, and it gets 60-70MPG.
Now I ride it every chance I get and keep the miles off my $40k pickup truck.
When I was looking for a car I was looking for 3 things: 1. Low gas mileage 2. Cheap/Reliable 3. Not run by Elon Musk
So I got a used Corolla Hybrid and plan on driving that for at least 5-10 years. But I understand that I’m not a profitable customers to most car companies.
The overall company can run low on capital or the share price may drop too far and induce leadership changes.
The product has to reach capacity targets to pay for overheads and fixed costs.
A competitor can drop their prices.
A supplier can go out of business or have their own production issues - fires and floods happen ever year.
Many governments have ramping targets for safety and efficiency.
Any particular government can increase taxes or tariffs, causing an unplanned uprooting of production from one assembly plant to another, costing at least millions of dollars; also unknown costs due to uncertainty.
Consumers preferences change over time.
---
With all of that, the fruit that withers first is the smallest - the cheapest or leanest.
I'm sorry if this is upsetting.
