PETER BROWN

What will cars cost? 3 takes on a thorny issue

Peter Brown is publisher and editorial director of Automotive News.
A friend at Ford Motor Co. told me cars are certainly going to get more expensive in the next few years as automakers add costly technology to clear the higher hurdles of new fuel-economy regulations. All the low-hanging fruit for fuel efficiency, he said, has been harvested. From now on, it's going to cost more moolah.

Well, I gave him a counter argument: The automakers won't determine the price. The customer will determine the price.

And if a customer will pay $325 a month for a car, that'll be the price. And the automaker had better deliver him a car he likes for $325 a month. Maybe the customer will settle for a smaller car, or a slightly slower one. But the customer is not going to pay $500 a month just because the automaker's costs went up: Tell somebody who gives a darn.

The customer doesn't care about the automaker's costs. The customer will determine the price.

Then another Ford friend, senior to my first Ford friend, walked by. I floated my theory by her.

The winner, she said, will be the company that gives the customer the car he wants for $325 a month, without compromise. So we'd better come up with innovative and clever ways to cut weight, cut costs, and deliver the car the customer wants at the price he can pay.

Which of us is right? We'll see. What do you think?

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