For one, cheaper new cars would drive down used car prices because why buy used if you could afford new? People love new toys.

The new cars don't sell. A lot of companies have made that mistake, and they get rudely dismissed from the market. The Mirage is the most recent example. You make a new car, it is a worse value than the used cars at the same price point, and people don't buy it.

For two, the problem with new cheap cars in America has nothing to do with the used market. Please show us 1 new small sedan or coupe or hatchback made by any of the big 3 car makers? You can’t, because they flat out stopped selling them here to push their higher profit margin items: SUV’s. Make them the size they were in the 90’s and call them compacts or CUV’s!

Margins are not something handed down from god. There are two numbers at play - how much it cost the car maker to build something, and how much buyers are willing to pay. Higher margin features are where the buyer values a feature by far more than the cost to the automaker. There is no shame from anyone when automakers rush to supply that demand.

And for that matter, plenty of cheap sedans on the used market, so any attempt at making one would go straight into that buzzsaw.

Why don’t the car manufacturers do that all over the world? Because other countries aren’t as dumb as Americans and don’t believe in the need for a baby tank to get groceries or take little Aschleeighand Braydin to school.

There also isn't the huge overhang over 2nd hand cars in most of the world, nor a massive population at the top that are willing to buy much more expensive cars, and have those cars depreciate to become tomorrow's 2nd hand cars.