USA: There won't be any cheap new cars under $20,000 from 2025, says report

RahulNagaraj · 10th August 2024, 13:41

According to media reports, by the end of 2025, there could be no new cars on offer priced below $20,000.

The reports mention how most automakers are slowly cancelling their low-margin budget models and concentrating on the premium segment which has high profit margins.

USA: There won't be any cheap new cars under ,000 from 2025, says report-mirage.jpg

Among the most recent are carmakers like Nissan, Mitsubishi and Kia. Japanese brands Nissan and Mitsubishi both confirmed that production of their Versa and Mirage offerings, respectively, will end in early 2025. Kia has also announced the discontinuation of its entry-level model, the Rio sedan and hatchback at the end of this year.

The report also states that market trends favour larger cars loaded with features and tech, which results in them having a higher retail price.

Source: TheCarConnection

Link to Team-BHP news

lemedico · 10th August 2024, 17:02

I suppose this article should specify which geographical market they are referring to. As at least in India, and south east Asia, the $20k price barrier has, and will continue to offer plenty to choose from.

darkchild82 · 11th August 2024, 21:24

So Nissan has the Versa, but won't make it to India to compete with Hyundai's Verna and Honda's City... but will instead import the over-priced X-Trail?!

L8ButV8 · 12th August 2024, 03:01

This could be an opportunity for Indian manufacturers to take a shot at the American market. Over the last 10 years, Tata & Mahindra have come a long, long way and make world class cars at fantastic prices.

Take the Scorpio N and XUV 700:

Sells for 13-25L Ex-Showroom. That is roughly 8-16L ex-factory

Add in 1.5L for shipping & 3% import tax, its now 10-18L

Converting to USD, thats $12k-20k before sales and marketing costs
Lets assume 50% markup for S&M -- thats a selling price of $18-30k

That's a steal for such competent SUVs. The cars mentioned in the thread -- Mitsubishi Mirage & Nissan versa (basically the Sunny) are not in the same league.

Ofcourse, it comes with huge risk: (1) Large upfront investment is needed to do this right, (2) it will be a drain on profitability/earnings for a long time & (3) US could increase taxes for Indian car imports, like they did for Chinese imports &

Another option could be to do a JV with a US brand, wherein they can slap their brands on Mahindra/Tata cars and sell them. This will reduce the investment needed & will turn profitable much sooner.

V12Doc · 25th August 2024, 14:24

Mahindra and TATA would not work in the US, The products are nowhere close to what the American Public wants and the reason for not having *new* cars offered at 20k or below is that majority of the buyer upto 20-25k bracket have pivoted to just buying used cars because of inflation, average loan has increased to 72 months leading to lower payments and at 20k the automakers are not making a margin they need.

10th August 2024, 13:41	#1
RahulNagaraj Senior - BHPian Join Date: Mar 2021 Location: Bangalore Posts: 2,422 Thanked: 23,032 Times	USA: There won't be any cheap new cars under $20,000 from 2025, says report According to media reports, by the end of 2025, there could be no new cars on offer priced below $20,000. The reports mention how most automakers are slowly cancelling their low-margin budget models and concentrating on the premium segment which has high profit margins. Among the most recent are carmakers like Nissan, Mitsubishi and Kia. Japanese brands Nissan and Mitsubishi both confirmed that production of their Versa and Mirage offerings, respectively, will end in early 2025. Kia has also announced the discontinuation of its entry-level model, the Rio sedan and hatchback at the end of this year. The report also states that market trends favour larger cars loaded with features and tech, which results in them having a higher retail price. Source: TheCarConnection Link to Team-BHP news
	(2) Thanks

10th August 2024, 17:02	#2
lemedico BHPian Join Date: Aug 2013 Location: Agra, Cambridge Posts: 672 Thanked: 2,053 Times	Re: USA: There won't be any cheap new cars under $20,000 from 2025, says report I suppose this article should specify which geographical market they are referring to. As at least in India, and south east Asia, the $20k price barrier has, and will continue to offer plenty to choose from.
	() Thanks

11th August 2024, 21:24	#3
darkchild82 Newbie Join Date: May 2009 Location: Bangalore Posts: 24 Thanked: 59 Times Infractions: 0/1 (5)	Re: USA: There won't be any cheap new cars under $20,000 from 2025, says report So Nissan has the Versa, but won't make it to India to compete with Hyundai's Verna and Honda's City... but will instead import the over-priced X-Trail?!
	() Thanks

12th August 2024, 03:01	#4
L8ButV8 BHPian Join Date: Nov 2017 Location: Chennai Posts: 43 Thanked: 161 Times	Re: USA: There won't be any cheap new cars under $20,000 from 2025, says report This could be an opportunity for Indian manufacturers to take a shot at the American market. Over the last 10 years, Tata & Mahindra have come a long, long way and make world class cars at fantastic prices. Take the Scorpio N and XUV 700: Sells for 13-25L Ex-Showroom. That is roughly 8-16L ex-factory Add in 1.5L for shipping & 3% import tax, its now 10-18L Converting to USD, thats $12k-20k before sales and marketing costs Lets assume 50% markup for S&M -- thats a selling price of $18-30k That's a steal for such competent SUVs. The cars mentioned in the thread -- Mitsubishi Mirage & Nissan versa (basically the Sunny) are not in the same league. Ofcourse, it comes with huge risk: (1) Large upfront investment is needed to do this right, (2) it will be a drain on profitability/earnings for a long time & (3) US could increase taxes for Indian car imports, like they did for Chinese imports & Another option could be to do a JV with a US brand, wherein they can slap their brands on Mahindra/Tata cars and sell them. This will reduce the investment needed & will turn profitable much sooner. Last edited by L8ButV8 : 12th August 2024 at 03:03.
	(2) Thanks

25th August 2024, 14:24	#5
V12Doc BHPian Join Date: Nov 2013 Location: Worldwide Posts: 151 Thanked: 241 Times	Re: USA: There won't be any cheap new cars under $20,000 from 2025, says report Mahindra and TATA would not work in the US, The products are nowhere close to what the American Public wants and the reason for not having new cars offered at 20k or below is that majority of the buyer upto 20-25k bracket have pivoted to just buying used cars because of inflation, average loan has increased to 72 months leading to lower payments and at 20k the automakers are not making a margin they need.
	() Thanks