There are almost 100 million vehicles produced every year. Regulations require a backup camera but does not specify much on the quality of the camera and screen. If car manufacturers install a nice $50 camera in each car that would cost them $5B a year. So they go to the camera manufacturers and ask them for the cheapest camera that barely meet regulations. It will be a very crappy camera and probably not very usable. But if the camera costs just $5 in bulk it would just cost them $.5B in cameras saving them $4.5B a year.
Even worse then this, they can include an option to install a $50 camera at the factory which will be integrated into the entertainment system in the car. And because you are already spending tens of thousands of dollars on the car they might set the price of this option to $100 and it will still not be noticeable on the final bill. So by using a $5 in the base model they not only save billions but they also make $50 extra in pure profits on every sale just slightly above the base model.
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