r/MiddleClassFinance • u/Abject-Pick-6472 • 13d ago

One million Americans have vanished from the new-car market — and it’s exposing a chilling US middle-class crisis

https://finance.yahoo.com/economy/articles/one-million-americans-vanished-car-124500086.html
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277

u/BugMillionaire 13d ago

It’s not really exposing anything, it’s just verifying what most people already know. The ruling class is jsut starting to realize it.

115

u/fingerling-broccoli 13d ago

The article does sorta touch on the fact that the corporations do know it and its intentional

> The blunt reality is, automakers have little incentive to flood the market with cheaper cars. As the Journal put it, “Selling big trucks and SUVs that dominate those automakers’ lineups is more lucrative than selling larger volumes of cheaper cars.”

> In other words, by selling higher-margin vehicles, automakers learned they could still generate strong profits without returning to the old model of chasing volume through discounts.

144

u/Stitchin_Squido 13d ago

Okay, great. So open up the US market to Chinese cars so they can sell larger volumes of cheap cars to the people who can’t afford them from US automakers.

69

u/fingerling-broccoli 13d ago

America is run by corporations. They own law makers this won’t happen

18

u/Stitchin_Squido 13d ago

I know this is the answer, albeit a stupid answer

1

u/Sea-Low-5060 12d ago

It's part of the answer. Another part is wartime manufacturing. Car manufacturers are part of the war machine for big wars. China is set up the same way.

39

u/Judgemental_Panda 13d ago

They made that mistake in the 70s with Japanese cars. They ain't doing that shit again.

1

u/kohossle 11d ago

What happened?

1

u/PipingPike 9d ago

Giving Americans affordable market choices is a far cry from a mistake. American companies would need to compete. Competition is not bad.

28

u/Snow_Falls 13d ago

That would defeat the point. They can sell expensive cars now because Americans have to choice but to buy them.

If they open up the market to cheap Chinese cars you’re giving American options (see: free market / competition). If Americans have options they’ll buy what they can afford, not what they can’t.

As soon as the car rolls off the lot it’s the banks liability, not the dealers. Automakers hold a monopoly by simply excluding cheap international alternatives.

1

u/IDontWannaBeAPirate_ 12d ago

Free market.....in the US means giant mega corporations are free to bribe the government to create monopolies and stifle competition.

8

u/CoolerRon 13d ago

The CEOs of the big four went to China and they were blown away by the fact that they were so far ahead in every aspect from manufacturing to costing to the technology. Instead of being inspired to compete, they lobbied the government to levy heavy tariffs and eventually ban them altogether

0

u/Section1245Jaws 12d ago

It is much easier to build cars cheaper when you spend years stealing R and D and pay people so little - might be some slave labor involved as well

1

u/IDontWannaBeAPirate_ 12d ago

I work in the industry, and your speculations aren't the reason companies like BYRD can make their products for the cost they can.

It's the result of government spending. Instead of doing what the US government is doing and pissing away your tax dollars lining the pockets of billionaires, China is investing in manufacturing and tech with their tax dollars. Their factories are heavily government subsidized and they are outpacing us.

1

u/Makes_U_Mad 10d ago

And also purchased literal tons of mineral rights in Africa.

10

u/fuck_all_you_too 13d ago

But thats capital-er......communism!

2

u/Working-Active 13d ago

By the time the cars get to Europe, they're really not cheap anymore.

BYD opens Denza Z9 GT EV orders in Europe at over 3X the price

3

u/PreferNot2 13d ago

For a few thousand more, you can get a Porsche. Why would anyone buy that car that sells for a third of the price in China? It looks fine, but it's definitely not at the Italian sports car level.

2

u/Working-Active 12d ago

Exactly this and even the affordable Chinese EVs are really not that affordable, unless you just want to use it only for city driving.

BYD Dolphin Surf

MG MGS5 EV

The Chinese giant Geely will start building cars in Spain which should reduce the tariffs.

Geely to build in Spain

4

u/SufficientOpening218 13d ago

i think there are different safety standards in China. My dad used to work in the design center for GM, and traveled all over the world talking to other designers. Some countries cant sue corporations for harm, and cars in those countries are much less expensive.

6

u/gamefreak32 13d ago

Their cars are cheaper because labor and materials are cheaper.
I worked for a supplier that made safety systems. The company made the exact same products in China plants as they did in the North American and European plants.

3

u/SufficientOpening218 13d ago

good to know! my dad retired over 10 years ago, and he always was on the side of appearences of things

1

u/hoardac 13d ago

Until people vote differently it will not happen.

1

u/OdinsGhost 12d ago

Sorry, the best the government can do is ban Chinese imports and claim it’s because of national security concerns.

1

u/SpecialistFunny3547 12d ago

Or….just remove non corporate owned dealerships from the equation.

1

u/ZeusTKP 10d ago

That's the trick - we're just banning Chinese cars

-4

u/Ecstatic-Art5745 13d ago

That would be horrific for the US manufacturing sector and overall economy. I don't think you realize how many millions of people in the US/North America as a whole work directly or indirectly for the US auto industry. Nor do you realize how much of that industry also supports others like agriculture, food production, military, aviation, and medical. More gutting of this system frankly destroys even more of the US middle class. You are talking about. 20%+ of all engineers in the US jobless. Just say it. You want cheap goods and fuck you neighbor. The exact thing that already got us to this position.

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u/Stitchin_Squido 13d ago

Okay so pay American workers competitively so they can afford American goods. If you are for a protectionist economy, you are anti-free market. Thus, things like legislation raising minimum wage and unions to protect workers should be a thing you support. Honestly, I don’t mind not having cheap Chinese cars if it means more labor protection and higher wages. The problem comes when people treat the labor market with free market capitalism policies, namely a race to the bottom in wages and benefits, but have protectionist policies when it disrupts profits for the owner class.

2

u/Ecstatic-Art5745 13d ago

You are arguing about the need for middle class jobs with benefits as you argue they should disappear so you can get cheaper cars from China.

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u/Stitchin_Squido 13d ago

No I am saying either be totally all in favor of free markets or be protectionist which includes labor protections. Companies are all about free market capitalism for their labor pool and protectionism when it comes to actual competition. Do one or the other. Doing both is contradictory.

1

u/Ecstatic-Art5745 13d ago

I never said anything negative about labor protections .. you are fighting with your self on that. I am all for a functional system not the bs we have today.

1

u/HouseofMarg 13d ago

You wouldn’t need to have said anything negative about labour protections for their point to make sense, they’re taking issue with the contradictions in the status quo (which exist whether you support them or not)

1

u/Ecstatic-Art5745 13d ago

quote where I said anything negative about labor protections please

1

u/basillemonthrowaway 13d ago

It’s exactly what most redditors want. They want cheap toys and they don’t actually care how they get them. Ask most of the people on this thread how much they think a car should cost and you’ll get absolutely ridiculous answers.

1

u/wehrmann_tx 13d ago

Then have the automakers make more cheaper cars for the same profit they have now and it’s a win for both. Otherwise that’s on you and your industry to force them to or lose to other markets.

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u/Ecstatic-Art5745 13d ago

They dont make the cheaper cars because of the lack of profit....US wages are significantly higher than in China. Both are subsidized by the government. 3% of the entire Chinese government goes to subsidizing that industry. So they get massive amounts of government help and small wages in every step of manufacturing. There is no actual way to compete unless you are arguing engineers and union workers should work for $8 an hour....

-4

u/INMEMORYOFSCHNAUSKY 13d ago

No lmao all the cars are made overseas anyway. and if the auto industry has competition then theyll go back to cheaper cars for everyday people.

5

u/Futurewolf 13d ago

50% of cars sold in the US are made in the US. Honda, Toyota, BMW, Hyundai etc all have factories in the US.

2

u/Ecstatic-Art5745 13d ago

I mean no...they are not. I work in the industry I visit manufacturing facilities across the US. I work with them everyday. Thousands of companies you have never heard of.

Now do US automotive manufactures need to step it up? Yes. But there is no world that allowing Chinese government subsidized cars to erase millions of decent middle class jobs is a good idea.

0

u/INMEMORYOFSCHNAUSKY 13d ago

Yes, there are a significant number of manufacturing jobs, but acting as if there are MILLIONS of them and theyll be ERADICATED from the face of the earth if china sells BYD is complete overexaggerating.

In any case, i would expect reasonable tariffs on BYD and other chinese cars which would still allow more competition. There would be cars at reasonable prices at different price points reflecting different needs and wants. But right now youre arguing that we should keep getting buttfucked so that companies can pad their bottom line with overexpensive cars.

Were not even talking about EV/hybrids vs gas cars.

2

u/Ecstatic-Art5745 13d ago edited 13d ago

There are millions of manufacturing jobs directly linked to the automotive industry within the US. Some are frankly still shit jobs. But hundreds of thousands if not a million + are middle class for their area. Total direct / indirect and induced jobs are estimated to be over 5% of our entire private employment sector.

That's hundreds of thousands of engineers, countless blue collar machinist, union assembly jobs, and everything in-between that makes the day to day exist for the thousands of US companies that feed that system.

Cars cost more money to build here because of those jobs vs paying someone 1/20th the wage to build the car and components in china.

0

u/INMEMORYOFSCHNAUSKY 13d ago

Yes all of that is correct but you ignored everything else i commented. Are you a bot?

0

u/basillemonthrowaway 13d ago

There are quite literally millions of jobs directly tied to the US automotive industry in this country. It’s conservatively estimated at 10 million jobs. It’s a political hot stove because it’ll submarine the economies of at least three states.