Do we really need all that safety stuff?

[gone-ot]

Instead of the "Mile-High Club" (flying) it's the "Miles-Long Club" (driving)?

[Hersbird]

You keep saying buyers don't want them but you don't know because they are 100% outlawed here, it's a choice taken away by the pro-choice crowd. I am telling you I for one, and I hardly believe I am alone would buy one. With modern global economies and the massive shipping from overseas you don't have to have 100,000 of them to make financial sense. One cargo container at a time works just as well. Point is, it is not allowed.
The nano is more of a $2000 car.
This also go me thinking of how safety has added $1000 to every car according to that study from 2001, I wonder if they did the same study how much they would figure the entire powertrain adds to the cost of the car. What do you want to bet that number suddenly makes the $1000 number seem like a much bigger part of the total.

[Fat Charlie]

Originally Posted by Hersbird

I don't care that the car companies don't want to undercut their profits.

Walmart can support...
My dad's small town store can hardly support...

The second part explains why there's more to the first part than simple rent seeking. Your dad's store serves a market. A tiny one. So tiny that no matter how much he charges for stuff, he won't net all that much and no matter how much stock he orders, his suppliers won't give him very good prices. Wal-Mart buys so much that it has a gun to its suppliers' heads and sells so much that it can afford to undercut your dad and still make tons of money.

In the car business, Paul Elio is your dad. He is producing (or at least attempting to) a cheap, efficient car. A really nice one that lots of users here want to buy. But his scale sucks- his development efforts aren't being subsidized by sales of other models currently in production. His suppliers see his orders as basically one-off custom jobs, not anything that they can spread their costs over millions of parts. He can't sell enough units to keep things running unless he has a sales network- and unless the Pep Boys (was it them?) idea works, he'll have to build that on his own, store by store. Nobody's going to sign up to sell a car that they can't make money on.

I don't care that the car companies don't want to undercut their profits either, but there's the only market that matters. Manufacturers won't put money into something that their customers won't put money into. I can't drive a car that I can't buy and I can't buy a car that the car companies won't build. They won't build a car that will undercut their profits. A real bare bones car from the big boys will hurt their profits in many ways, but look at bare bones cars from the past- either they lasted long enough to move upmarket and survive like the Japanese and Koreans or they didn't, like Yugo.

You need to sell a lot of cheap cars to make enough money to survive, and there isn't a big enough market in the US for stripped down cars to make them worth building. You can probably do a kit car with only the safety features that you want, but you can buy a lot of nice used cars for a lot less time and money if you're willing to have an airbag or two. Are you running a Hersbird-Spec Locost, or is your automobile market participation limited to a used Aspen with a Hemi?

Don't argue about what you ought to be allowed to do if there's no viable market for doing it- nobody can make a profit selling you the car you want and you haven't built one yourself. Do you think eliminating requirements for airbags, seatbelts, ABS, stability control and the like will give us a budget package for the Yaris? I think it'll give us a track package for the Corvette instead. Because that's what the market here is willing to buy.

It's not oppression, just business. Market driven business.

Originally Posted by Frank Lee

They say safety then text while speeding off.

They say safety so that they can blissfully text.

[Hersbird]

The Elio only is possible because it is a motorcycle not a car, it would end up normal priced or impossible to build at all if it were a car.
Again and again I will say the market is there for the cars but they are not here. That is not because of scale or profitability but because they are outlawed. The people already making and selling cars here are very happy that is the case.
government not the free market is what is denying my choice. I would personally go to India and buy a shipping container full of them to use and sell here if the government wouldn't take them from me and put me in jail for doing it.

[some_other_dave]

Originally Posted by Hersbird

You keep saying buyers don't want them but you don't know because they are 100% outlawed here...

If buyers in an area that allows them don't want them, what makes you think buyers here do? We have seen two examples so far, India and the Philippines. They're allowed to be sold, but they aren't selling.

You might want one, sure. You and fifty of your friends might. No problem! But in order to pay for the cost of importing them (heck, even just getting them here!!) a company would have to sell something like fifty thousand of them, every year. And that size market, as far as we can tell, is simply not here.

The cheapest new cars here aren't doing that well, and that says that the market for inexpensive cars isn't very strong. Plus you can see that the super-cheap cars don't do well even when they are allowed to be sold... The auto makers see that, and they do not see a market for ultra-cheap cars.

-soD

[niky]

Originally Posted by Hersbird

You keep saying buyers don't want them but you don't know because they are 100% outlawed here, it's a choice taken away by the pro-choice crowd. I am telling you I for one, and I hardly believe I am alone would buy one. With modern global economies and the massive shipping from overseas you don't have to have 100,000 of them to make financial sense. One cargo container at a time works just as well. Point is, it is not allowed.
The nano is more of a $2000 car.

The Nano was $2k when it was launched. It's now $3k-$4k. If I recall right, they had to add the high end variant because sales of the "stripper" were terrible. (I told you, I've been following the Nano saga for a looong time).

Tata Nano awaits its twist of fate | Business Standard News

Again, in case you aren't getting what I'm saying: Even poor people did NOT want to buy the $2000 Nano!

This is because a $2k car without air-conditioning or the ability to maintain highway speed doesn't compete with a $10k car. It competes with a $2k motorbike and a $2k used car. Both of which are more appealing.

-

As Fat Charlie says, it's all business. If you don't have the volume in sales, you're never going to keep the price that low.

Case in point: The "Sand Reeper"... a Chinese-built UTV that doesn't need to meet strict Federal road safety requirements:


The originals can be purchased in China for $6k:
Utv 4x4 - Buy 4x4 Utv 800cc,Utv 800 4x4,4x4 Utv For Sale Product on Alibaba.com
(A friend and I were talking about importing them to sell a few years back. Buy them in bulk, and they're much cheaper)

But in the US, it goes for twice that. Without airbags, ABS, added crash safety or even power steering.

Low sales volumes increase the cost of shipping, marketing and stocking spare parts. I see some of the newer concerns are claiming production in Mexico. That's a laugh... setting up shop to produce the cars there simply jacks up the price even more. (up to $15k for some vendors)

-

Nobody is building your car because they would lose money hand-over-foot on it. Even in countries where you'd expect people to buy them, they're still losing money hand-over-foot (Tata had to shutter the Nano plant for a spell due to poor sales). What makes you expect them to be successful in America?

You would buy a stripper micro-car. If I were still single, I would buy a stripper micro-car. But honestly, there aren't enough people like us to make it worth selling.

This also go me thinking of how safety has added $1000 to every car according to that study from 2001, I wonder if they did the same study how much they would figure the entire powertrain adds to the cost of the car. What do you want to bet that number suddenly makes the $1000 number seem like a much bigger part of the total.

That's already been answered. The prices from 2001 are bound to go down over the years. But if you need more evidence:

http://www.mckinsey.com/~/media/mcki..._supplier.ashx
Scroll down to page 12, where it notes that additional safety equipment added $600 from 2001 - 2010 (and note, no airbag on 01 Camry)... and yet, the actual inflation-adjusted price of the car has gone down. Which means all safety equpment, as well as improvements to the crash structure are being absorbed by the OEMs.

Like I've said before... you get much more nowadays, for less money. If you really want to lower prices, you have to get manufacturers to strip away the luxury options, which add significantly more to the cost of the car than the safety equipment does. And to do that, you have to somehow convince millions of buyers that, no, they don't want satnav, steering wheel controls or heated seats.

[RedDevil]

We had a 1998 Maruti Alto, err sorry Suzuki Alto.

It was very basic. Seat belts, no air bags, no ABS, no A/C.
It had a decent 1 liter engine with just enough power to get it to highway speeds.
There was literally nothing on it that could be downgraded to make it cheaper, yet retaining functionality and rigidity.
Its original sales price was just under € 8,000, that was about $ 8,500 at the time.

We now have a € 9,500 Hyundai I10 with an 1.1 liter engine, air bags, electric windows, radio/CD, A/C and so on. It is bigger, faster, much safer and just as economical.
If you had to choose between the Alto and the I10 as they are, almost everyone would choose the I10.

You can have the I10 without A/C and with wind-down windows for 1000 less.
It would still have the safety gear and be better than the old Alto, for about the same money.

In 2000 Suzuki had to stop selling the Alto, it no longer met the minimal safety requirements.
Hardly anybody noticed as there were enough other small cars available that did for the same money.

Stop dreaming about $ 5,000 cars. Not gonna happen.
To make them that cheap they have to be cutting cost where even Maruti does not dare.

And the Elio? What Elio?
i'd love to see that dream come true.
Up till now it is just a dream, or maybe better put: a nightmare.

[user removed]

If you want to build an inexpensive car profitably you need to address the complexity of the whole powertrain. Reduce the parts count by 25% and there is your profit margin.
WITH NO OPTIONS WHATSOEVER.

regards
mech

[RedDevil]

If you want to build an inexpensive car profitably you need to address the complexity of putting it together and make sure you can sell it in large numbers.

Take the Citroën 2CV for example.
A very basic, yet cleverly designed car with all kinds of smart ways to save material and parts, which made it very light yet reasonably reliable.

And quite labor intensive to build.

It did not matter in the first years after the war, with the economy in shambles and limited availability of materials.
It became a disaster in later years, when material prices dropped and labor cost soared.

Nowadays not many hands touch a car on the production line, everything is robotized.
The parts that go into the car are also built in robotized factories, making them dirt cheap as long as the numbers are high enough.

Manufacturing costs are a lesser part of the sales price of a car than it used to be.

[Xist]

Very eloquently written, Niky.

Now, how much to get my car covered in rhinestones?