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Show k 1 WHAT NEXT FOR CAR PRICES Even the most optimistic forecast of automobile prices over the period ahead does not include any downward adjustment toward more reasonable levels. The best that can be hoped for in the near future is a slower rise in sticker quotes than has been the case during the inflationary surges of the past decade or so. The cost at the new-car new-car lot has more than doubled, on average, since 1972, soaring to approximatley $9,000 for cars made in this country. Price hikes on the 1982 models that were introduced to the public last October were some 5 percent above the levels of the preceding year's models. This is how the advances averaged out for the United States Big Four in 1982 as compared with the 1982 models: General Motors, 6 percent; Ford, 4.8 percent; American Motors, 3.8 percent; and Chrysler Corporation, 3.7 percent. Everything taken into consideration, it is probably that there will be an average boost in the vicinity of 2 percent for 1983 models. Few if any responsible analysts within the industry feel that a complete freeze on retail quotes for that period is possible what with Detroit's massive losses over the past couple of years. FIGHT FOR SURVIVAL The fearful slump that has hit dealer showrooms in virtually all sections of the country has put a tremendous number of sales firms out of business over recent years. And there have also been a good many instances where well-established dealer companies have taken over the marginals unable to stay afloat. The battle to keep going is still a tough one, and it is hoped by those in the business that the slower climb in sticker prices will encourage consumers to buy in spite of scarce money and continuing high rates. Should the 1983-model price increase be held down to about 2 percent, as many hope and believed, it- is conceivable that consumers could be induced to get over the "sticker shock" of the past few years and actually consider replacing their old cars with new. If they accept a three-year repayment schedule, it will add an average of only about nive dollars monthly. ..an amount that would not knock the budget of many families too much farther out of whack. WAYS OF RESTRAINING PRICE GAINS One reason that sticker prices may be kept from soaring again is that the United Automobile Workers union has agreed to a great number of concessions. This is contrary to the persistent drive for costly pay and worker benefits pushed for and received over many decades, whether basic industry conditions were good or bad. To stay alive, Chrysler was required by the federal Chrysler Loan Guarantee Board to make important concessions with suppliers, dealers, the UAW, and others to qualify for government-backed loans of $1.5 billion. Between 1979 and 1982, the union gave up $1.07 billion in raises, living cost pay adjustments, and other fringes amounting to approximately $500 a car. Naturally, in order to remain competitive both General Motors and Ford fought tooth and nail for similar arrangements. There were tense sessions with GM which bogged down under certain demands, but subsequent conferences between the UAW and Ford were more successful. The union recieved assurances of job security for employees in return for reduced outlays for wages and working benefits that have been estimated to save the company about $1 billion every year which would amount to roughly $200 per auto. VIEW OF THE OPTIMISTS Detroit will try to keep its small cars within the price range of Japanese vehicles to prevent further slicing into its domain. Nearly all insiders tend to look for fourth-quarter improvement in the auto industry as the 1983s hit the market, what with restrained sticker increases and a likely overall business recovery. |