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Why automakers push SUVs...

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posted on Oct, 9 2003 @ 06:39 PM
We have known for some time that the oil industry is very interested in preventing the advancement of alternative energy sources. This is very simply because the oil industries want to keep crude oil as the main commodity because that is what is profitable for them.

Now it seems that auto makers want to keep the biggest gas hogs they make as the premier sellers. Sort of a vicious circle, but that shouldnt surprise anyone. After all, the auto and oil industry goes hand in glove.

Despite the upcoming oil shortage, the government is giving a special tax cut to businesses that purchase large trucks and SUVs. If gas prices are going to keep climbing, auto makers will have a harder and harder time selling these behemoths. So why don't they sell more smaller cars instead? Because big SUVs are the only vehicles that make a profit.
Dan Lienert writes for that automakers lose money on cars that sell for under $30,000. This information is hard to come by: "At one time, we did have info from the dealers on what they sold," says Mike Greywitt, of J.D. Power and Associates. "They were indicating how much profit they were making on each car. It's not being made public now."

Why the secrecy? Auto makers don't want you to know that you're paying top dollar for something that's essentially a fancy version of a much cheaper car. The bigger, higher- priced vehicles are made from the same mechanical underpinnings, or "platform" as cheaper vehicles, in order to cut costs.

Ford's Lincoln Town Car is the same underneath as a Ford Crown Victoria or Mercury Grand Marquis, but Ford sells it for $20,000 more. General Motors uses its Chevrolet Silverado pickup as the basis for the more expensive Suburbans and Tahoes. A Lincoln Navigator makes around $20,000 profit although it costs about the same amount to build as a Ford Explorer or F-Series pickup.

posted on Oct, 9 2003 @ 06:46 PM
The fact that were not allowed to know how much they make on these things leeds me to belive there is a big profit margin on cars. Perhaps if there was %60 markup on these cars and people knew they wouldnt by them.

For now your best bet is to pay your bills and keep driving the same old POS.

If youw ant an SUV Im sure they will come down in price when Gas gets high enough.

[Edited on 9-10-2003 by websuspect]

posted on Oct, 9 2003 @ 06:48 PM
You are not far off there....

The auto makers make probably about that much profit on new cars, compared to the cost of manufacture (especially since most of the American makers are now exporting manufacture to Mexico)

posted on Oct, 9 2003 @ 06:50 PM
I was guessing that whatever the depreciation value of the car was is closer to the actually value of the car.

If it devalues %60 when you drive off the lot than maybe that SUV is worth $12,000 and the Mustang is really worth $6000.

Alls I know is I cant afford a new car and Im still driving a Ford Escort.

posted on Oct, 9 2003 @ 06:52 PM
If they made a car in the US it would probably be assembled %90 by robots. The seat dashboard and steering wheel are %90 plastic. The engine, everything else is probably made from other recycled cars.

posted on Oct, 9 2003 @ 06:55 PM
When you buy a small cheap car you are in effect getting a subsidy. Automakers cut the prices on small cars so that they can sell more in order to raise their CAFE, Corporate Average Fuel Economy.

Large cars and SUVs are more popular with buyers. Profit margins are always made on the popular products.

Buyers of gas hogs are helping someone else pay for small cars. If small cars become popular, the price will skyrocket.

posted on Oct, 9 2003 @ 07:08 PM
If people actually realised how little it costs to make the products that they buy,they would likely be shocked,the markup is huge on most items,the sellers guard this info carefully.
Same with labor.
I once had a cheap car,a 1980 ford fairmont futura,I was picking around the junkyard for some parts one day,and realised that just about every mustang part was a direct fit on the cheap car.
I made it into a ford futura 5.0,it was cool.
It works both ways.

posted on Oct, 9 2003 @ 08:23 PM
It's a conspiracy!!!

posted on Oct, 9 2003 @ 08:35 PM
The big push must be working... my dad had a Toyota 4Runner, then he bought a Toyota Sequoia, and my uncle just bought a Lincoln Navigator. It very well might be a conspiracy...

posted on Oct, 10 2003 @ 12:10 AM

Originally posted by prophetmike
The big push must be working... my dad had a Toyota 4Runner, then he bought a Toyota Sequoia, and my uncle just bought a Lincoln Navigator. It very well might be a conspiracy...

Yeah it is working. I got a Jeep Grand Cherokee. I love it. I need an SUV because im always carrying computer equipment around for jobs, lan parties so I need a car with lots of space.

posted on Oct, 10 2003 @ 12:22 AM
It's called Marketing.

People buy SUV's for status, paying the premium price for them confers status upon the owner.

the auto companies do their best to create the myth of status for their customers and as pointed out here it is very profitable.

so tell me how much better is the average mercedes than a lexus for example? I know it costs a lot more.

posted on Oct, 10 2003 @ 12:35 AM
I had an awesome post ready and my comp ate it. SUV's are desirous to detroit for many reasons.
Oil companies surprisingly are the largest purveyors of alternative fuel tho.

As far as the branding question though, an OREO is always better than an identical sandwick cookie. It just IS. And a Lincoln will always be better than a ford, no matter how similar. Is it worth the markup? Thats a consumer decision. And it is a decision that savvy marketers know we will make if we can afford it. So consipracy? Yes. A consipracy to make more money. Is that bad? No. Its capitalism. Marketing Savvy. It will get more difficult as the lower priced store brands and knockoffs become better. But it will always be there. Humans crave status. We always will. that may be the true original sin.

posted on Oct, 10 2003 @ 02:08 AM
Yes all true but marketing is where psychology and sociology intersect with the business world.

Marketing is all about perception.

Yes the quality does matter and yes it does vary but the trick or slight of hand is to convey more quality than they are really getting for the price they pay.

posted on Oct, 13 2003 @ 01:32 AM
Neo, i agree with you, esp about marketing being where sociology and psyche intersect.

But, I think its not about a perception of quality. For americans it's about status. I know that if I get an Audi A4 its about the same as a well appointed Passat. But I love driving that Audi around. The same holds true for a Navigator. Its not really about the quality of the 4 wheel drive in that SUV (sometimes it is, and those people have old Landcruisers and Bad ass Broncos) its about people at a stoplight saying to themselves "damn thats a good looking machine"

People want the status. Thats why some many people make the choices they make. To be fair, status is deminishing somewhat, which can be seen in the popularity of some 'lesser' brands.(or store brands, formerly known as generics)

In days gone by, the quality of established brands far exceeded the generics or lesser brands. Now the line is smudged. The quality is there. The major brands are running on fumes, provided by status. Japan gave us an eye opener on quality in the last few decades.

So to contradict myself, Americans do love quality. Domestic manufacturers had to step up the quality, design and performance to match.
But if you can afford the status to go with the quality, most americans will choose the status. If all i need is a station wagon, but I can afford an Excurursion, I'll buy the Excursion. If I NEED 4 wheel drive, and can't afford too terribly much, I'll get a subaru with leather and CD. American like performance, and theyt like quality, but they love status. Its still about beating the Jones's.

posted on Oct, 13 2003 @ 01:56 PM
automakes are in big trouble. this year, toyota displaced chrysler, i think, as one of the big 3 auto manufacturers. our auto industry is in huge trouble, because more people are buying foreign, and because unions have made health care/workers comp so expensive that they CAN"T EVEN BREAK EVEN. so yeah, they're gonna do whatever they can. its crazy.

posted on Oct, 24 2003 @ 10:57 AM
link heard me...they released their version of an SUV...and took out the S and the U. In their ad it reads "This vehicle is by no means to be taken off-road...or used in bad weather such as snow". So...right's brainwashing...gotta have that status symbol. I own three cars...all bona-fide Japanese....Mazda (everyday driver)....Subaru AWD Wagon (sport utility...especially in snow)...and Kia...(wife's everyday driver)....and they all have been outstanding in performance and upkeep cost...including gas. I run circles in my Subaru around $50,000 Cadillac Escalades when it snows here. You may see me at the gas pump once a week...and I work in my kidding. So...don't fall prey to their commercials and an older Japanese made car and enjoy the money you are saving. One last note...SUVs are not safe...although they may be able to run over a Honda Accord...they tip over very easily...see them all the time in snow storms off in the median on their roofs...just a warning.

posted on Oct, 24 2003 @ 11:11 AM

Ford's Lincoln Town Car is the same underneath as a Ford Crown Victoria or Mercury Grand Marquis, but Ford sells it for $20,000 more. General Motors uses its Chevrolet Silverado pickup as the basis for the more expensive Suburbans and Tahoes. A Lincoln Navigator makes around $20,000 profit although it costs about the same amount to build as a Ford Explorer or F-Series pickup.

well its very simple. some people believe that having a name to show off is something to be proud of and makes them wonderful people all the while not realizing they have more dollars than sense (hahaha i made a funny) as they really are paying for the same vehicle underneith the name badges and sheet metal. there are some options on the "higher end" models such as the navigator that the expedition doesnt have BUT....its not enough to make a huge price difference as the one you see at the car lots. they jack up the prices on thos supposed "high end" vehicles because they know people will buy them and be the envy of their neighbors , friendsand coworkers because it is perceived they have more money, reality is they just spent more money on the same vehicle with a different name on it. (explorer/aviator, escalade/tahoe, navigator/expedition)

its really the same mentality that schoolkids have about clothes, it has to be name brand so they can impress their friends. the auto industry knows this and plays upon the consumers own stupidity and consumers are all too willing to fork over the cash. blame consumers for paying for overpriced vehicles not the industry, like any other industry they are there to make money, if the demand for lower prices were strong enough they'd lower prices but for everyone one person who wants them to lower theirprices on cars there are aboput 10,000 people willing to pay whatever price is offered them. sad but true.

people are also punch drunk on the power they feel in a SUV. they feel invincible and act like bullies so thats another factor that comes into play here. some also dont care that SUVs are gas guzzlers or have higher roller over rates than cars.

i think its a little more than the big bad evil auto industry and the oil industry, its also stupid "gotta keep up with the jone's" consumers that play a role in this.

as long as people are willing to pay hand over fist for over priced gas guzzlers thats what they're going to build for them. just about every car makers does it now.

posted on Oct, 24 2003 @ 01:12 PM
SUV or 4x4 vehicles do tip over - i agree then again if you try to drive at 80mph in a vehicle with a high center of gravity what can you expect ?. I have a 4x4 and love it after my Miata - better visibility and traction. If people took the time to read theor owners manuals then the myth of the SUV rolling over would go away. As for petrol consumption its certainly better than my previous car - a 2.0i Laguna and living where i so - farming area a damn site more practical.

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