I'm not sure the number of cars matters quite as much as how they reach that number.
Competition is important for both motorsports and just automotive stuff in general, so the most important part is that the car list allows us to play with rivalries like Ferrari vs Porsche, Mustang vs Camaro, Viper vs Corvette, WRX vs Evo, and so on. Not just models as well, but preferably in competing trims too.
If they have to trim the car list, then as long as they can make the "Divisions" and eras represented feel cohesive then I think it will be fine overall. There will always be a few people left out whose favorite car didn't make it, but if they just make things a totally random hodgepodge of cars with some gaping holes in the lineups then I think a bigger portion of the community will be disappointed.
Unfortunately for us, this is something T10 has struggled with. FM5 is probably the most glaring example, as they decimated the GT1 lineup we had, leaving only the DBR9 and nothing to race it against. They also added the '69 Boss 302 Mustang for FM5... but for some reason dropped the '69 Camaro Z/28 and kept the '69 Camaro SS instead. Even since then, a lot of DLC has added cars that don't have competitors, and failed to fill in gaps for cars the game shipped with that didn't have competitors.
Of course, it's a video game with a PI system, so I suppose with enough upgrading then technically anything can be a competitor to anything, but from my experience running community events since FM1, people rather enjoy playing out those rivalries. Even if it's not in a racing series, I've seen a lot of people do sorta virtual car reviews and video comparisons where they pit rivals against each other like in the magazines.