April 2 - The car industry is back in the driver’s seat, as prices for cars rise, and incentives fall- just when consumers and businesses need to buy new cars. Bobbi Rebell reports.
There has been a power shift in the auto business- and the car industry is back in the driver's seat. Consumers with aging vehicles- on average 11 years old- and businesses that are back in growth mode- are having to pay up for the cars they now need. IHS Automotive's George Magliano: SOUNDBITE: GEORGE MAGLIANO, SENIOR PRINCIPAL ANALYST, IHS AUTOMOTIVE (ENGLISH) SAYING: "The volume is not only going up. The prices are going up because the manufacturers are managing their inventory much better." REPORTER BRIDGE: BOBBI REBELL, REUTERS (ENGLISH) SAYING: "Car prices are also near record highs. According to Truecar, the average price is now more than $31,000. And incentives are down 1.7 percent from a year ago. " General Motors has had to increase incentives $180 on average- but its average selling price per vehicle was up $400. Overall, GM sales were up more than 6 percent in March- though below forecasts; with Ford and Chrysler having their best selling month since before the financial crisis. Dealers are also making more money. Net profits up 6.2 percent in 2012 vs 2011. Bigger is better- truck and SUV sales have been the big driver- tied in large part to the housing boom. For example, Ford saw a 16 percent spike in sales of its top selling F Series. From the top 10 most profitable vehicle models - 2 are U.S. trucks- the GMC Sierra and the Chevy Silverado. Many of the others are specialty cars, which command higher prices and lower incentives. A trend Magliano says is becoming more common industrywide: SOUNDBITE: GEORGE MAGLIANO, SENIOR PRINCIPAL ANALYST, IHS AUTOMOTIVE (ENGLISH) SAYING: "There's a lot less haggling. They can really- basically what happens is the incentives or the push to sell the vehicle is less, and two they have an option to trade the customer up." March was the fifth month in a row that U.S. auto sales held above the benchmark 15 million vehicle annual sales pace.