WHY ARE SUVs SO EXPENSIVE?….So I watched 60 Minutes tonight, and in the segment on SUVs I heard once again about how the profit margin on these vehicles is anywhere from $5,000 to $10,000 or more. This compares with ordinary cars, which we are lead to believe are practically sold at a loss.
I’ve heard this so many times that it must be true, but what’s the explanation for this? The same companies compete in both the car and the SUV market, so shouldn’t competitive pressures force the profit margins to similar points? Isn’t that how this whole free market thing is supposed to work?
Can anybody out there who works for a car company explain this?