Car prices seem to rise non-stop despite advances in manufacturing technology. But a TV, or smart home devices, or some other similar piece of home tech continually becomes cheaper from the time it is released. Why?
In: Economics
Cause over time cars have generally gotten more complicated. The modern car isn’t anything like a Ford Model T, they have vastly more amenities and apparently consumers were willing to pay for these instead of a cheaper car.
Because they keep adding stuff to cars.
Newer safety and reliability and fuel efficiency tech.
A lot of that stuff isn’t visible, but are both much less likely to get you injured or killed in a crash, and much less likely to have one in a newer car than an old one. Ideally they are also better integrated with tech and have more reliability monitoring etc.
Some markets (usually the developing world) have very cheap cars that might share a model name with a western car, but a lot of them have fewer crash protections or mitigations, slower tech etc.
You can make cheaper cars, but remember they need to exist in the whole markets. So the EU you need to do everything from the dense slow miserable streets of a big city, to 130km/h highways in France or the autobahns in Germany. In the US you have NYC and Los angles, and Texas highways that are like 135km/h speed limits.
My 2020 model year car has twice the engine displacement (and twice the horsepower) of my model year 2015 car, yet used about 60% the fuel/km as the old one. And that’s not even a full change in generation (granted, different cars, a bmw 328i to an m850i but same manufacturer).
Some of it is also just customer choice. People want more space, more speed, less maintenance headaches (my new car has laser headlights that should last more than 10 years, my 1993 dodge had headlights that lasted 2, but were 1/10th the price or less).
I don’t have time to look for a source, but years ago Tata made a car in India for 1500 bucks. It was… A car. That occasionally caught fire, but was cheap. To make it safe enough to sell in North America would have increased the price to something like 15k. You can have cheap, or you can have safe. Regulators have generally settled on safe. The EU values pedestrian safety more than the US, but since the big manufacturers want to make the same car for all markets those benefits tend to be spread out pretty well.
Cars are really big chunks of metal. There’s only so much you can do to make large chunks of metal cheaper to produce.
We already went through all the rapid growth and development in mass production steel. It’s basically a fixed cost at this point based on the cost of materials.
As for electronics, they are going to put as many in the car as they think people will pay for. So even if these things get cheaper, they’ll just put in more because they can afford it.
They already did that.
But it happened a century ago.
The first automobiles were introduced in the 1880s and cost $30,000 in today’s currency. No roof, no doors, no lights, crank start, no brakes, steered with a tiller and went slower than a horse.
By 1925 the Ford model T cost $4,500 in today’s currency. It had an enclosed cab, lights, brakes, steering wheel, battery, starter switch, pneumatic rubber tires, and reached 45 mph.
You were just born too late.
Cars benefit from technological advances because they use new and better technology. The value keeps increasing.
Compared to twenty years ago consider some examples 1) cars have cameras for blind spots 2) cars have AI safety features 3) cars have better gas mileage.
Car prices increase when the price of resources needed to make a car increases as well.
As for cars being cheaper, prices drop before the launch of the next generation vehicle
Simple they’re not made in China where your home tech is.
Cars even assembled in Mexico still have a lot of American and Japanese parts, and are designed in very high labor cost America.
A lot of technology has become cheaper because mechanical parts have been replaced by computers.
For example washing machines used to have this long complex system of cams and switches to control the program (it was attached directly to the control dial which is why it would turn as the program ran). Carefully tuned electromechanical parts = expensive.
Now you just throw a 5 cent microcontroller and some relays in there and you’re done.
Cars with internal combustion engines are full of dumped mechanical parts that you just can’t get rid of, so they will always have a price floor because of that. Add to this increasing safety and emission standards and the price stays high.
With far fewer moving parts electric cars have the potential to be cheaper, but the material that the giant batteries are made of is expensive keeping the price up.
The best TVs are always about the same price but that’s because they’re always making even better TVs. It’s the older style TVs that get cheaper.
Latest Answers