cheap cars

It's called "the economy of scale"

GM would rather sell ONE car for $1,000,000 than sell 1000 cars for $1000 each.

Thats why they focus their product development/ads on $50K+ SUV's and pickup trucks.

True, for Ford and Chrysler as well.

But as they say: "putting all your eggs in one basket can lead to a disaster". The NA 3 did it to themselves. I'm a car buyer and became frustrated how they limited their variety of cars in the 90s. Toyota, Honda and Nissan played both sides of the fence very well. It's all about who has the best management and unfortunately the employees suffer most when management have a lack of foresight.

The presence of "foreign" car companies has saved us several times from the NA 3 forcing cars we don't want down our throats. This situation started in the mid 50s, when I bought a European car because I couldn't stand the oversized, gas consuming, poor handling NA designed cars. In the 60s the NA compacts recovered them a bit and I bought one, but then the compacts just had to grow in size, until 70s NA cars were crap I didn't want, so I bought a Japanese cars in the 70s. Smaller cars in the 80s recovered NA cars a bit and I again bought them, but they grew in size then were ignored because the big money was in oversized unnecessary personal vehicles. Finally gas prices are high enough to force the monster vehicles off the road- cheers! I hope the NA manufacturers recover, but they will have to change product very fast to do so. They may not know what to produce for the rapidly increasing gas prices, just as I don't know what to buy. For now I'm getting the equivalent of Prius mileage by using my mid sized car 40% less.

Check out the top two sellers from Toyota.

The $25,000 Prius and the $75,000 LX570. I saw that yesterday on msn.com.

The selling prices of cars have not much relation to the production price. The cheapest cars usually sell for a very small profit and are close to the production price. Expensive cars do not cost much more to produce than the cheap cars. They are essentially the same as the cheap cars. The so called luxury is what costs. You get a holder for glasses, a bit more comfortable seats, a plush cloath, nice radios and shining interior. The added value is mostly superficial and does not mean much. Interestingly enough then new improved technology comes around every so often and is often first introduced in the more expensive cars and as optional extras in the cheap cars. A few years later they are part of the standard. In extreme cases the only difference between a cheap car and its more expensive brother is the sticker on it and the paint. The optional extras are very very expensive.