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Carmakers Search for Growth in a Parts Bill That Keeps Growing
· New York time
Legacy automakers face a tougher 2027 as commodity, logistics and memory costs rise and their ability to pass increases on to customers becomes harder to extend. The squeeze puts pressure on a familiar business formula: build a vehicle, price it attractively and earn enough to cover the costs of making it. Each part of that formula can move independently. Higher material and shipping expenses make production more costly, while customers may be less willing to accept another increase in the sticker price. Memory costs add another item to a calculation for vehicles that increasingly depend on electronics. A manufacturer can talk about future growth, but the price of getting a car to a buyer still matters today. The industry's challenge is not merely to produce more persuasive presentations about the next model year. It is to manage costs while competing for shoppers who compare the total price with what they can afford. Those pressures also complicate assessments of how much room automakers have to protect their margins. A larger screen may be easy to display in an advertisement; a higher logistics bill is harder to turn into a selling point. For an industry that likes to introduce the future with polished launches, 2027 is arriving with a rather unglamorous accessory: the spreadsheet for the parts.
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