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Small-Scale Question Sunday for January 29, 2023

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

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Why aren't car manufacturers raising their prices? Prices for used cars have doubled and there is a shortage of new cars because prices are too low, causing ridiculously long waiting periods. Dealerships are reportedly trying to raise prices but manufacturers don't want them to. Why do the manufacturers care and why don't they just raise prices themselves and increase their profits?

They are effectively doing this by only keeping top trims & high margin cars in stock.

They don't just want to make short term profits, they want to permanently change buying behaviors.

If there is a shortage then prices are below the market clearing price. Why are they and why do manufacturers not want dealers to charge those market clearing prices?

Because the automobile industry is in the middle of an existential disruption from new electric car manufacturers. They would rather maintain their market position than make a few extra dollars in this process. The scariest proposition is someone buying another car.

3 low margin Camrys is better than 2 high margin Camrys + 1 Tesla/Rivian/etc. sold. They want to starve out the new players.

out the new players.

so it's an anti-competitive trust?