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Smaller engine is not cheaper, I can get a factory new 5.3 GM V-8 for less then a rebuilt 2.5 subaru motor.
On top of that those $12,000 Nissans and Mitsubishis are loss leaders. They lose money on every one sold. They may even be losing money on the whole line of Versa and Mirage not just the stripped ones.I believe the Neon was the first small car made by the Big 3 to ever stand alone and make money. Those cost more then this miracle Elio in 1993! At this point I wish we could just buy a newly built 1994 Neon for $7000, or a newly built Metro.
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