Utility Bodywerks - Manufacturer of RV Hauler Beds
 
BY BRENT SNAVELY
FREE PRESS BUSINESS WRITER

While sales of cars and trucks in the U.S. continue to be more sluggish than expected, automakers -- especially the Detroit Three -- are enjoying the largest increase in average transaction prices in more than five years.

Industrywide, consumers spent an estimated average of $29,217 on a new car or truck from January through May -- an increase of $1,057, or 3.7%, compared with last year, according to estimates provided by Edmunds.com. Edmunds' estimate is based on a sampling of data from about 40% of U.S. dealers.

But, the Detroit Three are outpacing the industry's gains -- giving the automakers an opportunity to improve profit margins. Edmunds says average transaction prices increased 5.5% for Chrysler, 4.3% for Ford and 3.8% for General Motors.

Thomas King, senior director at J.D. Power and Associates, said the recent financial collapse, which helped the automakers restructure and close extra plants, helped automakers reduce production and cut incentives.

"In the past, you had manufacturers focusing a little more on improving volume and reducing prices to get that volume," King said.

Now, King said automakers have embraced a more disciplined approach that represents a fundamental "change in the dynamic of the industry."

New technology While the underlying reasons for the transaction increases are somewhat different for each automaker, they generally include inventory reductions, reduced incentives, a demographic shift among buyers this year and consumers deciding to buy new technology and options.