Subject: Re: No more affordable cars
Do you have some data on demand elasticity with respect to price?

Nothing specific, but we are all seeing it in real time now. Demand falls off DRAMATICALLY when prices shoot up AND interest rates increase.

However, that is not the direct cause of what I see happening.

Bigger house AND much higher price means NOT affordable for a family. 50-yr mortgage essentially makes multi-generational households a necessity. So the kids can NOT afford a new house Pulte wants to sell (too big, too expensive = unaffordable) to get their profit.

We are seeing that with Ford. They are abandoning the large market for the smaller one. Bigger ATP and GP, but FAR FEWER VEHICLES SOLD. So Ford shrinks--and shrinks--and shrinks. Fewer and fewer and fewer buyers for their EXPENSIVE (but not better !!) vehicles. We see the Chinese cars. Competition eats up Ford and spits them out. Much less expensive cars sell--as fewer Ford cars get sold to the total US market. Remember: US not interested in markets outside the US. Plus, US mfrs can NOT use many foreign-made parts, especially the parts that are expensive when "Made in USA" but far more reasonably priced if made outside the US. TARIFFS mean the cost is ALWAYS HIGH !!