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Big SUVs are the only vehicles that make a profit which might explain the big marketing budgets associated with them... |
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| Why Auto Companies Push SUVs (October 2003) |
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Despite the upcoming oil shortage, the US 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 Forbes.com 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... |
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