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.

 
 
Ford Utility Bodywerks
By DAN STRUMPF and BREE FOWLER
AP Auto Writers 
 
NEW YORK (AP) -- A top Ford executive expects industrywide U.S. auto sales to rise for the first time in more than two years this month, thanks largely to the government's Cash for Clunkers program.

Sales may have risen as high as 13 million units on an annualized basis during August, Mark Fields, Ford's president of the Americas, told reporters on Friday.

Retail sales at Ford Motor Co. in August have already surpassed last year's levels with a weekend still to go, he said. Ford's sales in July rose 2.4 percent.

"Overall, we thought it was a very, very successful program in jump-starting sales," Fields said of the clunkers program, which enticed drivers to trade in gas guzzlers by offering big rebates on new, more fuel-efficient cars and trucks.

Automakers are scheduled to report monthly sales on Tuesday. Many analysts are forecasting a year-over-year increase for an industry that has taken a beating during the recession, although year-ago levels were already depressed.

Cash for Clunkers offered a strong jolt to sales. The program, which formally ended on Monday, spurred 690,114 new sales at a taxpayer cost of $2.88 billion, according to the Department of Transportation.

Ford was one of the top gainers from the program. The Ford Focus compact car and Escape crossover were among the top sellers, though Japanese automakers sold more vehicles than U.S. companies.

Fields estimated about 30 to 40 percent of clunkers sales were "truly incremental," meaning that they came from consumers who had no plans previously to buy a car. The rest, he said, came from people who were going to buy a car later on.