Auto Companies Show Off '96 Models, But Can Buyers Afford Their Dream Car?
IT'S the car Tim Spill was hoping for, but now he worries it may be out of reach financially.
The Detroit pharmaceuticals salesman delayed trading in his 1991 Ford Taurus until the introduction of the all-new 1996 model. It went on display this week at the North American International Auto Show in Detroit.
``I love my Taurus, but it's got too many miles on it,'' Mr. Spill says, gazing admiringly at the '96 model spinning on its display stand. ``I'd love to get the new one, but I hear the price might go up another $2,000. That's just more than I can afford.''
Spill isn't alone. While new passenger-car and light-truck sales tipped 15.1 million last year, a six-year high, industry analysts say the figures actually might have hit an all-time record were it not for rising prices. The average new car cost $20,045 during the final three months of 1994. That's nearly double what a car cost a decade earlier, according to the United States Commerce Department.
Even after adjusting for wage increases and inflation, the typical customer must now shell out the equivalent of 27 weeks of wages for a car, compared with less than 23 weeks in 1984.
``We've got to be concerned about affordability,'' acknowledges Robert Eaton, chairman of Chrysler Corporation. To some observers, affordability is, in fact, the single-biggest threat facing the auto industry.
The biggest price hikes are hitting the industry's newest and most popular models, such as Chrysler's Jeep Grand Cherokee. Consumers can also expect a big bump when the automaker's new minivans go on sale mid-year. Ford Motor Company reportedly will add anywhere from $1,200 to $2,000 to the sticker price of the redesigned Taurus when the car reaches dealers next fall.