- 11,805
- Marin County
You do bring up some good points. It seems as if Mazda producing more expensive cars and selling less of them is a trade-off they are willing to accept. Though I do wonder how successful of an entry-level luxury car brand they'll be when the time comes. The Japanese luxury car market isn't in the greatest shape in the US market; Lexus has stagnated for the last 5-6 years, Acura has still been trying to find their direction after decades, and it is honestly enigmatic to me that Infiniti hasn't pulled the plug at this point. Mazda has never a been particularly high-seller in the US, and it's only decent selling car on the lineup is the CX-5. As aforementioned, most of its other products have grown outdated, and the Mazda3 is simply too expensive to meaningfully compete with the Civic/Corolla/Elantra.
I also do wonder about the future of the new affordable car market in the United States. It's not secret that new cars have grown more and more expensive in recent years (adjusting for inflation, of course), and many brands have pulled out of the subcompact and compact car market, as heightened safety and emissions regulations hinder these cars from being profitable. The ones that still do exist, like the Civic, Corolla, and Elantra, are all above $20,000 and can easily be optioned into the mid-to-high 20k range. Even the subcompact Versa and Accent have moved slightly upmarket, now being at the higher end of the $10k price range. The Mitsubishi Mirage, as crappy as it is, may be the only true "cheap new car" left. And it's obvious that subcompact and compact CUVs cost thousands more than their sedan and hatchback counterparts. Even the existing mid-range and luxury car and SUVs/CUVs are also moving upmarket to a certain extent. I guess the question is, will buying a new car eventually become financially unviable for moderate income earners?
There will always be a way to separate moderate income earners from their income in exchange for a new car. The car industry has managed to pull the trick of selling monthly payments rather than the full price of the car. Used car dealerships now frequently advertise the monthly price rather than the full price. $300/mo seems doable, yeah?
The trick is that whereas in 1995 a typical car loan would have been 36 months max, the standard is now 60 months and more often than not, its 72 or even 84 month. You can even get a 96 month car loan. That's basically a mortgage for a possession (lets not call it an asset) that will almost assuredly be worth next to nothing after that 8 years has passed - and I shudder to think the total interest due for the typical person who selects the 96 auto loan option.... The whole economic model of the west has pivoted to developing business models that produce recurring revenue - think subscription dues - as a way to demonstrate growth and excite their shareholders. I don't know the split between banks and automaker owned finance companies, but the gravy train is rewarding all - loan interest, origination fees, late penalties, service fees, etc. It's a monster.
Owing to Mazdas engineering prowess and lately excellent design, these new I6 RWD cars could actually be bloody fantastic. I'm sure they are going all out, deploying every last resource available to them to launch these products. If it doesn't work out, at least they went down fighting.
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Only because it's somewhat relevant to this thread and Mazda's push for premium. It shouldn't really be all that surprising that Bernard Arnault recently (and briefly) became the world's richest man. His business is made entirely of high end luxury goods. $110bn surge in the last 14 months! That's equivalent to Lebron James' salary for 2,500 years - in 14 months. That's $165,000 per minute. I honestly can't think of any new brands, in any sector of the economy, that prioritize value. And the existing companies that do focus on value have been almost universally floundering, especially in the last year. We're in a really warped economic period right now and I don't think anyone can really say what comes next.
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