It really doesn't go against economic theories. Demand has no direct relationship with profit. Supply and demand affect price, which has an effect on profit. When demand goes down production slows and supply eventually reaches a new equilibrium with demand at a new price. Cars that are already constrained in supply could continue to do well while commodity cars would go unsold. There would be a short term downward pressure on price, but it wouldn't last forever.
I'm not saying it wouldn't be a hard blow for the car industry at all. It would decimate it. But what would be left standing would be the most expensive cars and cars equipped to be rented, and the margins on those are much higher. Companies like BMW are more well equipped to take on that new market reality.
Perhaps the part I was unclear about is that the "them" in my OP was high end car manufacturers like BMW.
I'm not saying it wouldn't be a hard blow for the car industry at all. It would decimate it. But what would be left standing would be the most expensive cars and cars equipped to be rented, and the margins on those are much higher. Companies like BMW are more well equipped to take on that new market reality.
Perhaps the part I was unclear about is that the "them" in my OP was high end car manufacturers like BMW.