The class of latest automobiles costing lower than $20,000 has shrunk in recent times, and it might maintain youthful consumers out of the marketplace for a automobile, pushing them additional towards ride-sharing and different types of transportation.

Information from J.D. Energy exhibits that gross sales of low-cost automobiles fell off a cliff in recent times, even if total automobile gross sales have been robust. In 2013, gross sales of automobiles costing lower than $20,000 made up 20.1% of whole annual new automobile gross sales. By 2020, that determine was 9.4%.

One motive for the drop is the regular thinning of the sub-compact and compact automobile segments, from which many sub-$20,000 automobiles got here. These have been changed by subcompact and compact sport utility automobiles, which are likely to have barely larger sticker costs beginning at or simply above $20,000.

After all, with auto gross sales at or close to document highs in recent times, there was little stress to promote much less worthwhile automobiles, which subcompact and compact automobiles are usually.

However cheaper automobiles are priceless for bringing younger consumers right into a model and constructing loyalty over a lifetime. Some auto trade analysts say that by selecting to promote dearer automobiles, automakers threat leaving cash on the desk sooner or later.