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Ditch SUV's (programming.dev)
submitted 7 months ago by to c/fuckcars@lemmy.world
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[–] 2 points 6 months ago (1 child)

Yeah, "cost plus" pricing strategy (link) means that you make a fixed percentage of profit. When you sell a vehicle for $200, you make $20 in profit (at a 10% markup rate); But if you sell a $400 vehicle, you can make $40 in profit. It's crazy to me that they're not just selling the same $200 vehicle for $220 to make $40 profit ($180 manufacturing cost), but that's apparently the world we live in: People accept that companies can make more profit on higher-cost items.

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  • [–] 2 points 6 months ago

    It's worse than that actually.

    It's not the same markup rate for a higher priced product. It's a higher markup rate. Crossovers in particular aren't much bigger than sedans and wagons. It's only actual SUVs with off-road equipment (lockable diffs, 2 speed transfer case, etc) that cost significantly more to manufacture than regular cars.

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