Sticker prices of Big 3 cars and light trucks dropped an average of $221 as the 2006 models were introduced.
General Motors and Ford Motor Co. actually reduced their prices from final 2005 model-year prices. That may have happened during the bleak days of the 1930s depression, but it certainly has not happened since.
The Chrysler group hiked prices.
Value pricing is the hero of the GM and Ford actions. That's the auto industry's newest catch phrase; it is an effort to bring sticker prices closer to transaction prices and cut the high rebates of recent years. It requires sticker-price reductions in many cases.
Whether value pricing will work remains to be seen. It is off to a rough start because it comes on the heels of the summer-long employee-prices-for-all giveaway in which Big 3 cars and trucks were sold to the public at prices below auto dealer cost.
There is no way that value pricing can match that.
Maybe second thoughts are already blooming. Ford Division value-priced its 2006 Expedition SUVs an average of $956 lower than the 2005 models. Yet, the 2006s carry a buyer rebate of $3,000, exactly the situation that value pricing was supposed to prevent.
The 2005 Expedition has a $2,000 cash rebate in addition to employee pricing.
GM is the apostle of value pricing. It has committed $300 million to promote the program. But Ford outpaced GM by a wide margin in price cuts for 2006.
Ford reduced its stickers an average of $506, or 1.6 percent, an Automotive News analysis finds. GM's reduction averaged $301, or 1.1 percent.
The Chrysler group had an average 2006 intro increase of $291, or 1.0 percent, according to the Automotive News analysis. Combining the three manufacturers on a sales-weighted basis results in an average reduction of $221 per model.
A year ago, each of the three automakers raised prices for the 2005 introduction, the analysis shows. The increases averaged $25 for the Chrysler group, $185 for Ford Motor and $233 for GM. Automotive News said the average Big 3 hike was $170.
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