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Tighter inventory holds up U.S. car prices

Aug. 14, 2010 at 12:02 PM   |   Comments

DETROIT, Aug. 14 (UPI) -- Analysts say being less cutthroat in their efforts to win the monthly market has paid off for U.S. automakers, who are getting higher prices for their products.

Analysts told The New York Times that the average price of an American car has ticked up more than $1,300 over last summer, which has resulted in another $1,100 profit per vehicle.

As a result, auto sales were relatively positive in July, according to Friday's retail-sales report issued by the U.S. Department of Commerce.

Analysts said the recent shedding of production capability has resulted in fewer vehicles on the lot, which means dealers are less inclined to offer over-the-top incentives to move inventory.

"We're not trying to kill each other for this month's market share," Chrysler head Sergio Marchionne told the Times. "Those days are over. We're not offering $7,000 checks to try to sell a car."

While this summer's rebound has been good news for stockholders and auto workers, some economists warn the U.S. industry may have to trim its sails even further to withstand inroads from foreign producers that have also become leaner and more competitive.

© 2010 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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