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The materials to build the average car cost about $5000. Big, small, medium, it doesn't really matter. Luxury will increase that but even if you did cut 25% of this cost you don't go from a $12000 car to a $7000 car. I would be willing to bet those few $12,000 cars out there are sold at a loss on the back of a more traditional $25,000-35,000 cars as well. A company selling only $7000 cars has to make profit on just those cars. There are no engineers working on high profit SUVs that can spin off a few parts for the cheap seats. No high profit SUVs to cover all the admin, accounting, HR, legacy, etc personnel costs. The good thing you have is you haven't built up a big legacy of costs and maybe the economy is so bad you can get away with $10-$15/hr workers but you will still need to pay these very high "affordable" health care premiums.
I remember when the Dodge Neon was the first US small car to supposedly be profitable. That was back in 1995 and even that car cost more then the Elio then.
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