Car Price Economics [changed title]

Maybe someone can explain it to me: why the auto industry is makeing more carswith less people and more technology and yet the price of a car keeps going up.
Shouldn’t the price go down ?

zipper,

It helps to have descriptive titles. I’ve changed the title for you.

DrMatrix - General Questions Moderator

Two (maybe 3) reasons primarily:

  1. The cost savings from automation and cost cutting are less than the increasing costs of wages, raw materials, etc.

  2. Because people are apparently willing to pay $20k plus for a car. The hottest selling vehicles of the last 5 or so years have been expensive (and profitable) SUV’s. If people all of a sudden refused to pay more than $12k for a car, the price would drop (and probably so would features, gadgets, luxuries, etc)

  3. I don’t have the data, but have cars gone up at a higher rate than wages (I mean an average car. I don’t doubt the high end cars have)? When people talk about how they could buy a nice house for $30k in the good ol’ days, they usually forget to mention that they made $10k per year then too. Has the cost of an average new care gone up faster than the average wage of the person buying it? If so, see answers 1 and 2 above. If not, the point is moot.