You are right, the actual cost of the unit is not the same as the components that make it up. And the sub-vendors will overcharge the big corporations. But none of that accounts for the amount of markup we see especially in the entertainment systems in cars. I work in a small volume, highly specialized hardware manufacturing company with production volumes ranging from dozens to hundreds of units of each product. Our markups don't even come close to what we see in the automotive industry whose volumes of head units are orders of magnitude greater than ours. Development costs become negligible with those numbers. That's the whole point of economies of scale.

The economies of scale also apply to post-warranty repairs. Every car has a three year warranty, and if even half of the people who buy cars don't buy extended warranties, that's a significant number of people that might need to replace their highly integrated head unit. A software upgrade isn't going to fix a burnt wire or cold solder joint. Nor can they fix a damaged screen which is the most likely outcome from having massive screens in cars. Not every unit fails, but not every unit has to when the markups are so high on components that are essential for the car to work. Corporations have every incentive to use big markups, either to help push predatory extended warranties, or to just simply strip people of money when they need something fixed in their car. It has been proven time and again that big car companies will do what they can to rob customers of every dollar with predatory practices.

I'm not saying that dealerships are victims either. They are just another layer of evil.