An economist took to The New York Times to argue that the inexpensive small car was killed by wealthy buyers.
Conventional wisdom, of course, has held that automakers, particularly the Detroit Three, have disdained small cars because SUVs and pickup trucks, particularly those that use body-on-frame platforms, are cheaper to build and popular with American buyers. This makes them more profitable.
The author, Clifford Winston, acknowledges this, but he suggests there are other causes, too. He blames protectionist policies from both Democratic and Republican administrations, plus a desire on the part of automakers to cater to buyers who could afford luxury vehicles — especially luxury trucks and SUVs.
Winston suggests that in order to get the industry, including foreign automakers, to start selling affordable cars again, tariffs must go away and the market must be opened to the Chinese — with restrictions in place to keep the Chinese from undercutting competition with unfair practices.
The whole piece is worth a read. What say you — is Winston correct? Or is it more simple than that — is it just that certain types of cars simply cost less to build and are in more demand? Or is it a combination of things?
Sound off below.
[Image: Hyundai]
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