Automakers Try To Increase Retail Sales Prices Through Reduced Incentives

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Washington DC November 12, 2007; The AIADA newsletter reported that the auto industry sees this fall as a good time to try to end a multi-year slide in real prices.

What Detroit – and rivals in Tokyo and Frankfurt – wants to do is convince consumers that the sticker price is closer to a fair price than in the recent past. According to the Wall Street Journal, the auto companies appear to be having some success – at least in the short run.

After years of declines, new vehicle prices have been flattening out since last December. Eight of the nine biggest car makers in the U.S. market managed to push up their average transaction prices for vehicles during the third quarter from the same period a year ago.

"I'm very encouraged by the discipline of the industry right now," says Ford Chief Executive Officer Alan Mulally. "All of us are on that path now to balance production and demand." Toyota's total inventory of unsold vehicles in the U.S. is just a 46-day supply as of Oct. 31, compared to 79 days for GM. Among the big European names, BMW is running the tightest ship, with just 24 days' supply as of Halloween.