The industry talks constantly about affordability, yet many automakers continue reducing entry-level cars while investing more heavily in trucks, SUVs, premium trims and specialty vehicles.
From the OEM perspective, the strategy is understandable. Larger and more distinctive vehicles generally produce stronger margins, while inexpensive sedans and hatchbacks can be difficult to build profitably.
But where does that leave the customer who needs dependable transportation and cannot afford a $45,000 vehicle?
Dealers may be forced to serve that buyer with older used inventory, longer financing terms or payments that still stretch the household budget. Meanwhile, brands risk losing first-time buyers who might otherwise remain loyal for decades.
Should manufacturers accept lower margins on affordable vehicles to protect market share and customer loyalty? Or is the low-cost segment simply no longer economically viable for traditional automakers?
Add new comment