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Why aren't cars less expensive?

As I said in my response to timhau, cars today use less steel and more aluminum/plastics in manufacturing, so while the amount may be at or near the same, the materials themselves are not. Also, cars are smaller, though they may weigh the same or near the same.

But at nowhere near the scale of Moore's law.

If cars had shrunk as fast as transistors, a car that weighed a metric tonne in 1970 would weigh a milligram today.

If materials prices had shrunk as fast as transistors, the steel that cost $100/tonne in 1970 would cost a penny for a fully-loaded container ship.

There's literally nothing you can buy at a billionth the 1970 price of steel. Anything worth that little isn't worth shipping.
 
Not to mention energy costs. It takes a lot of energy to make a car. (Consider only the energy needed to transport things like engines and transmissions from an overseas factory to the assembly plant in the U.S.)
 
For information technology goods' value in total GDP, most (all OECD, I think) countries use a hedonic price index which takes account of the improvement of the quality (in this case, processing power). So when comparing today's GDP to the GDP of 1985, a computer that is produced today would be valued at much more than its off-the-shelf price to account for how much better a computer is today (n.b. this is in addition to the inflation adjustment for real-value comparisons).

Andrew Wiggin said:
What we're paying for is reliability. We pay for cars that run for a hundred thousand miles without needing more than regular oil changes. If we get one that won't, we feel we've got a lemon.

/\/\/\
Basically the same idea.

I wonder about whether or not cars actually are more reliable today though. Is planned obsolescence a conspiracy theory?
 
One of the big things that adds a lot of cost is a century of working out the bugs. The early motorcars were simple, but they weren't durable by modern standards. They needed constant maintainance, and that meant that the operating costs were high.
<snip>

What we're paying for is reliability. We pay for cars that run for a hundred thousand miles without needing more than regular oil changes. If we get one that won't, we feel we've got a lemon.

But similarly, the use we put cars to has changed a lot.

Even just counting from the '50s, we drive our cars a LOT more miles per year. Overall, I'm not so sure a new car today lasts any longer (in time) than one bought in the '50s.

So the broadest point is that we're not really comparing the same product at all. So comparing price doesn't tell us much. Similarly, we shouldn't compare the price of an iPod to that of a victrola.
 
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And financing . . .

In 1968 you either bought a car or you financed some part of the purchase price over 12, 24, or maybe 36 months. The car depreciated so quickly that the bank was loathe to give you a longer loan and would almost never let you get upside down on the loan. So you put 20% down and paid it off by the time you were done with it. If you were lucky you got enough for the used car at trade-in to help with the next down payment.

Now, most people only pay the depreciation and the interest on the value of the car through leases and long term financing options with balloon payments. Very few people buy cars in cash or put much towards the paying off the car at the time of purchase. This makes it easier to buy a more expensive car with the same income.

I bet if you compared the average monthly payments they likely haven't gone up as much as price.
 
I wonder about whether or not cars actually are more reliable today though.

Really? What is the oldest car you have owned?

My 70's Wagoneer leaked oil like sieve and required transmission work on a near annual basis. The hood was up almost every weekend. Heck, I knew most of the guys at the local shop by name and could tell you what half of them would prefer to drink, were one to drop by late and need a drink. I think that truck finally left us after somewhere between 70k and 100k miles having lived a long hard life.

Compare that to my current family car that could go 10k miles between oil changes, although I usually get it done between 3k and 5k, and has never been low on oil even though I am about to turn 90k miles.

Is planned obsolescence a conspiracy theory?

Yes.
 
Another thing not discussed is that these products are at different points in their technological trajectories. There will come a day when computers reach the limits of their Moore's Law processing growth and storage growth curve. Computers are centuries behind automobiles (the first automobile is arguably from 1672, Benz patent was 1885).

The point is that we might want to compare the history of automobile pricing to only the first 50 years of computers to see if automobilies might have plummeted in price for awhile as technology developed and then ultimately levelled out. I believe this is called a sinusoid curve.

I think another factor is - ironically - fewer component competitors in the computer industry supply chain leads to economies of scale. Hundreds of PC assemblers but they are pretty much building their contraptions around Intel or AMD CPUs. There is no equivalent in automobile production. I'll bet if there was a megafactory in China making tens of millions of drive trains per year, retail prices could drop quite a bit.
 

I'd quibble about that. I think planned obsolescence is a marketing decision that is quite transparent. Manufacturers have to weigh product lifespan vs retail price, and just move the slider back and forth to find the profit peak.

Different manufacturers have different target markets with different expectations, and that's why different brands have different product lifespans.

It's very open, and not at all a conspiracy.
 
I would also throw in the consumerism. That's a variable that changes with society. The moment people stop spending over $30k on a personal vehicle simply because they can afford it, the average price is going to come down.

PS. My 2010 Focus with delivery charge was about $12.5k, before taxes and other fees.
 
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I wonder about whether or not cars actually are more reliable today though. Is planned obsolescence a conspiracy theory?

I'm pretty confident contemporary automobiles are more reliable than their predecessors, despite any marketing decisions about planned obsolescence.

Advancements in technology, trial and error, and increased customer expectations have simply moved the products in this direction.

Planned obsolescence means they're less durable than they could be, all things being equal.
 
Would all of your above examples be relevant maintenance issues in 1968? I am not a car expert, so forgive my ignorance.

The issues I'm talking about are early ones, but one thing I've noticed is that the trend of 'progress' in the designs between the early cars and the 60's was to innovate non-conservatively.

Basically, they were happy to throw out mechanisms that needed some fine-tuning in favor of mechanisms that were completely different, and needed their own cycle of fine tuning. For example, early brakes were cable or rod operated. This gave them plenty of leverage to stop early, relativly light cars.

Cars got heavier, so instead of finding ways to get more force out of rod/cable brakes, they developed hydraulic brakes. These gave a bit more leverage, at the cost of needing fluid filled periodically, lots of moving seals, precise machining, and fine-bore tubes that were subject to corrosion. They left (and still do) the mechanical brakes in place, since they were fundamentally more reliable, and labeled them 'emergency' brakes.

Cars continued to gain weight, so the next wave of innovation was the vacuum assist for braking. That took the effort down and increased the braking force quite a bit. With vacuum assist, the mechanical advantage of the hydraulic brakes wasn't technically neccesary, but it was the established technology, so the systems got spliced together.

With the increased force available, the front brakes, which do most of the work, could be simplified to rotor/caliper designs that were simpler and cheaper to make. Now we've got the interesting hybrid of brakes that take a lot of maintanance, need a lot of force, but only provide that force when the engine is running, and/if there's no vacuum leak. Most of us don't do our own brakes any more either, but they still need regular maintainance. This is not a triumph of design.

My personal tendency is to work the bugs out of technology, and only try something completely new and different to attack the problem when the old technology reaches its limit. I think it's really interesting in this case that the mechanical brakes are still the ones considered reliable, and required to be left in for emergencies and for stopping/holding the car when the engine isn't running.

A
 
I seem to recall Robert Heinlein having a good rant about this in one of his novels, perhaps 'rolling stones'. It's not in front of me at the moment, but I'll take a look and post it if I can find it. Basically, his concept of the modern automobile was a collection of systems kludged together, each one intended to correct the shortcomings of the previous, and none addressing the inherent problems with the original invention.



Here's another example from the vaults.

The first gasoline engines were stationary engines. They ran at a constant speed, and that speed was rather slow. The spark timing could be set at a certain point on the cycle, somewhere near top dead center, and the engine would run all day at that setting. Speed regulation was a matter of turning the spark on and off, creating the name of 'hit and miss engine'. Some engines, like the 'hot bulb' engine, didn't have any spark timing at all, as they used a red hot extension of the cylinder head to ignite the gas and air mixture. It took the form of a sheet metal bulb, connected by a pipe to the engine head. You heated it with a blowlamp before you started the engine, and the pipe connecting it to the engine head was supposed to keep the gas and air charge from igniting too early. Very simple engines, with low parts counts, and easily maintained. A farmer with hand tools could take it apart and put it back together. I've heard they're still made in sweden, as they're still useful in the stationary engine role.

When gasoline engines were adapted to cars, they were called upon to run faster, and to run at constantly changing speeds, as limited gear ratios required a lot of change in engine RPM between shifts. When an engine runs at high speed, the burning time of the gasoline affects the speed.

Where at slow speeds you'd want the spark to start the burn once the piston had reached the top and started down, at high speed, the gas wouldn't have much time to burn before the stroke was over. Then the exhaust valve would open while the gas was still burning, and the engine would blast fire out its exhaust, wasting most of the charge and running poorly with little or no torque.

The solution was to advance the spark timing, so that the gas was actually ignited as the piston was travelling upwards, and if you timed it right, the peak pressure would occur as the piston was travelling back down. Originally, this was something the driver had to do: he had to work the spark advance lever at the same time he was accelerating, so that the engine wouldn't lose power, but if he advanced the spark too far, or decellerated without retarding the spark, the engine would backfire and either grind to a halt or tear itself apart.

After multiple kludges and lots of trial and error, the solution to this was vacuum spark advance. The crankcase vacuum increases at higher RPM, and by a system of diaphrams and balancing springs working the spark lever, the spark could be kept roughly where it was meant to be. This was only a rough solution though.

Lots of other modifications were tried, and the spark advance on old cars is a pretty delicate and arcane bit of clockwork and ironmongery, and prone to need ajustment.

The modern solution keeps the vacuum spark advance, but adds electronic control. Now not only do you have the vacuum connections and diaphrams, but there are electronic RPM sensors, airflow sensors, pressure and vacuum sensors, and solenoid valves, all for the purpose of fine tuning the exact extent of spark advance. Some engines also modify the gas and air mixture by injecting inert gas, siphoned off from the exhaust manifold where the oxygen levels are low. Again, these are usually controlled by vacuum diaphrams and springs, with computer oversight to fine tune them.

What was a simple, low parts count gizmo that would run damned near forever was changed into a delicate, tempermental machine, first by making it do something that it wasn't meant to do, then by stacking layer after layer of kludged control system, each meant to regulate the previous kludge, and hopefully bring the system to some sort of reliability. Only recently, with pretty much total computer control of the engine, has that reliability been anything more than a dream, but just try to fix it yourself.

Now, the focus is moving to the hybrid vehicle. By using a small, simple engine to turn a generator, that engine can be set so that it's always working at its most efficient setting. Basically, this is using the gasoline engine in the role it was suited for, the stationary engine. The rest of the vehicle is a pretty standard electric car, and the bugs, with the exception of battery capacity, were worked out of the electric car long before the gasoline car was popular.

A
 
Edjumacation

The portrayal in Who Killed the Electric Car? and the testimony of Tesla Motors car owners claim that electric propulsion is very reliable and simple to maintain compared to modern combustion propulsion. This sheds light on why as I was ignorant as to the particulars. The difficulty with electric vehicles has been the creation and storage of the electricity. Finally after some hiccups we are seeing commercially viable solutions. If I had a garage or apartments buildings began installing parking space hook-ups I would be interested in a Tesla Model-S. As is I am leaning towards a gasoline generator electric car, which has the advantage of working off the current infrastructure plus future savings if the electric car infrastructure actually becomes reality.
 
OK, I got home from work and dug up the Heinlein rant. Here it goes (quoted as fair use, and only a tiny fraction of the whole.

From 'The Rolling Stones' by Robert A. Heinlein, the 1977 printing by Del Rey. Pages 52-54

Despite their great sizes and tremendous power, spaceships are surprisingly simple machines. Every technology goes through three stages: first a crudely simple and quite unsatisfactory gadget; second, an enormously complicated group of gadgets designed to overcome the shortcomings of the original and achieving thereby somewhat satisfactory performance through extremely complex compromise; third , a final proper design therefrom.

In transportation, the ox cart and the rowboat represent the first stage of technology. The second stage might well be represented by the automobiles of the middle twentieth century just before the opening of interplanetary travel. These unbelievable museum pieces were for their time fast, sleek, and powerful-but inside their skins were assembled a preposterous collection of mechanical buffoonery. The prime mover for such a juggernaut might have rested in one's lap; the rest of the mad assembly consisted of afterthoughts intended to correct the uncorrectable, to repair the original basic mistake in design-for automobiles and even the early aeroplanes were 'powered' (if one may call it that) by 'reciprocating engines'.

A reciprocating engine was a collection of miniature heat engines using (in a basically inefficient cycle) a small percentage of an exothermic chemical reaction, a reaction which was started and stopped every split second. Much of the heat was intentionally thrown away into a 'water jacket' or 'cooling system', then wasted into the atmosphere through a heat exchanger.

What little was left caused blocks of metal to thump foolishly back and forth (hence the name 'reciprocating') and thence through a linkage to cause a shaft and flywheel to spin around. The flywheel (believe it if you can) had no gyroscopic function; it was used o store kinetic energy in a futile attempt to cover up the sins of reciprocation. The shaft at long last caused the wheels to turn and thereby propelled this pile of junk over the countryside.

The prime mover was used only to accelerate and to overcome 'friction' - a concept then in much wider engineering use. To decellerate, stop, or turn the heroic human operator used his own muscle power, multiplied precariously through a series of levers.

Despite the name 'automobile' these vehicles had no autocontrol circuits; control, such as it was, was exercised second by second for hours on end by a human being peering out through a small pane of dirty silica and judging unassisted and often disastrously his own motion and those of other objects. In almost all cases the operator had no notion of the kinetic energy stored in his missile and could not have written the basic equation. Newton's laws of motion were to him mysteries as profound as the mysteries of the universe.

Nevertheless millions of these mechanical jokes swarmed over our home planet, dodging each other by inches or failing to dodge. None of them ever worked right; by their nature they could not work right; and they were constantly getting out of order. Their operators were usually mightily pleased when they worked at all. When they did not, which was every few hundred miles (hundred, not hundred thousand), they hired a member of a social class of arcane specialists to make inadequate and always expensive temporary repairs.

Despite their mad shortcomings, these 'automobiles' were the most characteristic form of wealth and the most cherished possessions of their time. Three whole generations were slaves to them.

This basically sums up how I feel about the gasoline automobile. In other news, I finally bought the service manual for my personal steel monstrosity, the dodge dakota, and have been busily these past weeks righting its wrongs, which are myriad.

A
 
Why are cars so expensive? Or computers?

They have ultra cheap cars in India, and ultra cheap computers in Africa.

It's quite simply a matter of quality vs. price, people are willing to pay more for better quality.
 
Why are cars so expensive? Or computers?

They have ultra cheap cars in India, and ultra cheap computers in Africa.

It's quite simply a matter of quality vs. price, people are willing to pay more for better quality.

But I still don't understand that.

We are able to choose from a huge array of products, ranging from low quality/low price, to high quality/high price for everything, except for cars.

The only option you have if you want a low priced, low expectation vehicle, is the used car market. Does this have something to do with it? If so, explain.

For instance, I can buy an a cheap acoustic guitar for $200, or I can buy a Taylor or Martin acoustic for $2000 or more... [edit: and there is a huge used market for acoustic guitars as well]

But with cars, I cannot find a new one in the U.S., NEW, for less than $11,000. Why? Why isn't the Tata sellable here?

I would buy it, but apparently there isn't a market here for it?
 
But I still don't understand that.

We are able to choose from a huge array of products, ranging from low quality/low price, to high quality/high price for everything, except for cars.

The only option you have if you want a low priced, low expectation vehicle, is the used car market. Does this have something to do with it? If so, explain.

For instance, I can buy an a cheap acoustic guitar for $200, or I can buy a Taylor or Martin acoustic for $2000 or more... [edit: and there is a huge used market for acoustic guitars as well]

But with cars, I cannot find a new one in the U.S., NEW, for less than $11,000. Why? Why isn't the Tata sellable here?

I would buy it, but apparently there isn't a market here for it?


You can pay $10K to $1 million for a car in North America, surely that represents enough of a low-high priced range.

What's 100 000 rupees worth in Idia? 1 years pay? Obviously $2500US is worth more in India. Above and beyond that India suffers from some of the poorest working conditions in the World. 500 000 peopl die each year from work related causes. When you don't have to worry about worker safey it tends to reduce your overhead. India also benefits from a fairly centralized population. It's purely speculation, but Tata also probably benefits from some reduced transportation costs as a result. India also has a much larger market for a sub-compact car. If you can make $100 per vehicle and sell to 100 million people, well you can do the math.
And finally Tata probably also benefits from some reduced liability and insurance costs.

When you pay for an $11K car here you get a little more than just a car. You safely employ the 5 or 6 thousand people that contribute to its manufacturing.
 
But with cars, I cannot find a new one in the U.S., NEW, for less than $11,000. Why? Why isn't the Tata sellable here?

Probably because the demand for "cheap rather than good" is served by the used car market in the U.S., while countries like India or China doesn't have the same amount of used cars for sale, so there's still unmet demand.
 
In the USA (& to a slightly lesser extent in UK), cars are seen as a status symbol, how much status would a Tata or a Fiat Cinquecento represent?
 

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