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Coffee Shop
J.R. Ewing is at it again.
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<blockquote data-quote="Douglas" data-source="post: 820772" data-attributes="member: 8840"><p><a href="http://www.forbes.com/2003/10/06/cx_dl_1006feat.html" target="_blank">http://www.forbes.com/2003/10/06/cx_dl_1006feat.html</a></p><p></p><p>The japanese can make cars cheaper because their cost of production is lower, nothing to do with safety.</p><p></p><p>From the above link:</p><p></p><p><em>Detroit's dirty little secret is that a lot of its cars don't make any money. </em></p><p><em></em></p><p><em>While most pickup trucks, sport utility vehicles and luxury cars are profitable, automakers tend to lose money on cars that sell for under $30,000. The trick is figuring out which ones. </em></p><p><em></em></p><p><em>Unfortunately for Detroit, its small cars have the opposite relationship between sticker and transaction prices. The outgoing Chevrolet Malibu, for example, has an MSRP of about $18,000--but dealers are selling it for $13,000. Cars like the Chevrolet Cavalier and Dodge Neon tend not to make money for Detroit. The small trucks and cars are commodities with fierce overseas competition, so pricing pressure is heavy. </em></p><p><em></em></p><p><em>High labor costs contribute to Detroit's struggle with profitability as well. The average American factory worker makes about $47 an hour, and the labor rates are typically the same for small and big cars. Engineering and manufacturing costs are also more severe in the initial years of a new vehicle. If a car company sets up a $500 million plant, payable over the first two years, the calculated costs of building cars go down once the tooling has been amortized. American automakers' inability to make much money on smaller passenger cars has created their current lopsided focus on trucks. In 1990, 33% of General Motors' sales were light trucks, but by 2002 that number had climbed to 58%--and to 65% at Ford and 76% at Chrysler</em></p></blockquote><p></p>
[QUOTE="Douglas, post: 820772, member: 8840"] [url=http://www.forbes.com/2003/10/06/cx_dl_1006feat.html]http://www.forbes.com/2003/10/06/cx_dl_1006feat.html[/url] The japanese can make cars cheaper because their cost of production is lower, nothing to do with safety. From the above link: [i]Detroit's dirty little secret is that a lot of its cars don't make any money. While most pickup trucks, sport utility vehicles and luxury cars are profitable, automakers tend to lose money on cars that sell for under $30,000. The trick is figuring out which ones. Unfortunately for Detroit, its small cars have the opposite relationship between sticker and transaction prices. The outgoing Chevrolet Malibu, for example, has an MSRP of about $18,000--but dealers are selling it for $13,000. Cars like the Chevrolet Cavalier and Dodge Neon tend not to make money for Detroit. The small trucks and cars are commodities with fierce overseas competition, so pricing pressure is heavy. High labor costs contribute to Detroit's struggle with profitability as well. The average American factory worker makes about $47 an hour, and the labor rates are typically the same for small and big cars. Engineering and manufacturing costs are also more severe in the initial years of a new vehicle. If a car company sets up a $500 million plant, payable over the first two years, the calculated costs of building cars go down once the tooling has been amortized. American automakers' inability to make much money on smaller passenger cars has created their current lopsided focus on trucks. In 1990, 33% of General Motors' sales were light trucks, but by 2002 that number had climbed to 58%--and to 65% at Ford and 76% at Chrysler[/i] [/QUOTE]
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J.R. Ewing is at it again.
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