Experts Predict Higher Car Prices Industry Expresses Fears Of A Consumer Rebellion
Automotive experts believe the price of some cars and trucks could rise up to 20 percent by the year 2000, and fear of a consumer backlash could force manufacturers to cooperate to hold down costs.
‘The incentive for that is overwhelming,” said David Cole, director of the University of Michigan’s Office for the Study of Automotive Transportation.
Cole presented a summary of the university’s biennial Delphi Forecast and Analysis of the North American Automotive Industry at the Automotive News World Congress, an industry conference.
He told reporters that automakers may be forced to cooperate in profound and unusual ways to avoid a buyer rebellion.
General Motors, Ford and Chrysler already work together on developing “precompetitive” technology through the U.S. Council for Automotive Research, which focuses on environmental, economy and safety issues.
But such cooperation could expand as automakers look for ways to cut costs, Cole said. For example, automakers might standardize parts, such as alternators, seat tracks and batteries.
“There (even) is discussion in the Big Three of the potential for standardizing automatic transmissions,” Cole said. “They’re driven by affordability - they’ve got to get higher volumes (and lower costs) out of some things.”
The Delphi forecast is based on surveys of more than 300 industry experts drawn from the ranks of automakers, suppliers, consultants and the academic community. It looks at what they expect from the industry five years and 10 years into the future.
Among the expectations:
The average price for the purchase of a new car built by a domestic automaker will rise to $22,000 by 2005 from $18,396 in 1994, without adding the effect of inflation. The average import car price will rise to $27,500 from $24,200, the forecast estimates.
Gasoline prices will remain relatively low, reaching $1.25 a gallon by 2000 and $1.40 a gallon by 2010.
One-price selling, eliminating the horse-trading aspects of car buying, “is going to increase modestly, but it’s not going to take over the industry,” Cole said.