If recently announced price hikes by General Motors go into effect April 13 as scheduled, the average price of a GM car will top $10,200. That's right -- over $10,000!
How many people, looking over today's bright new showroom models, can recall those "good old days" when a Model T Ford sold for around $550 -- and the daily wage at the Ford River Rouge plant was $5 --
Pricing automobiles has always been a matter of controversy -- and not just in the local used-car lot.
As the final shots of World War II neared, a headline on an Aug. 3, 1945, story in this newspaper declared: '46 Car May Cost 20 Percent More.
Consumer prices had been under a tight lid during the war years. But when controls ended, the pressures of inflation were released. Workers struck in many industries, and prices zoomed.
In the fall of 1946 the list price of a Ford deluxe sedan was $1,131; a Lincoln $2,185. The Chrysler New Yorker could be bought for $1,841. The Chevrolet Fleetmaster cost $1,076; and a Buick series 40, $1,346. A Cadillac series 61 carried a price tag of $1,935. Remember the Packard 6? List price: $ 1,624.
The 1942 ceiling on a new Plymouth deluxe was $889, compared with $1,142 in 1946. And a Chevrolet Fleetmaster, $885 vs. $1,076.
As inflationary pressures built, Ford Motor Company bucked the trend in January 1947 by cutting its car prices from $15 to $50. Henry Ford II said at the time that he hoped such "shock treatment" would halt what he called the "insane spiral of mounting costs and rising prices."
The lowest-priced Ford, the deluxe 6 Tudor fell $2 under the cheapest Chevrolet.
If the new GM '81 price list sticks, the base four-door sedan Caprice Classic jumps from $7,731 to $7,890; the Citation (X car) from $6,404 to $6,523; and the subcompact Chevrolet Chevette, $5,294 to $5,399.
An Oldsmobile Delta 88 Royale four-door sedan with a base price of $8,341 will approach the $10,200 figure if equipped with may of the popular options these days. Automatic transmission and power steering/brakes are standard. Air conditioning goes for $665; AM/FM stereo radio $178, power windows $224, rear-window defogger $115, electric door locks $142, tinted glass $95, cruise control $145, tilt steering $88, steel-belted radial tires $60, and front and rear floor mats $25.
The biggst price jump of all is $890 on the top-of-the-line, diesel-fueled Cadillac Seville --years ago at half that price, although it did switch to front-wheel drive when it was totally redesigned 18 months ago.
Ford and Chrysler, at this writing, are watching the price situation and trying to decide what to do.
"Ford would love not to boost prices," says Raymond Windecker, a market analyst with the company, "but it is trying to figure out whether it can afford not to jump prices."
Import prices also are soaring, with three of the Japanese makes boosting the list in the last couple weeks. Datsun raised US prices on its cars and trucks an average of $238, or 3.3 percent, which is right in step with the projected 3. 5 percent price rise by GM. The Datsun price hike on cars runs from $150 to $ 596.
GM stoutly defends its price action, saying that car prices have long lagged behind the escalation in the cost of living in the US. With 1967 as the base year of 100, asserts a GM spokesman, the consumer price index had climbed to 251 .7 by September 1980. The new-car component, by contrast, was 181.7.
Automakers argue that cars still are cheaper in the US than anywhere else in the world. The basic Ford Escort lists at $5,158 in the US, but in Europe it costs almost $9,000, says Mr. Windecker.
"It's not just that cars are lower-priced in the US than they are in other countries," he adds, "but US wages are higher than in most countries as well."
Another point carmakers today are trying to make is that the 1981 automobile bears little resemblance to the cars of the '50s, '60s, or even the '70s.
Also, carmakers assert, it takes Americans fewer hours of labor today to earn the price of a car than it did in the 1950s and '60s.
A Bureau of Labor Statistics report last year said that in 1950 it took 8.1 months of work for the average person earn the price of a new car. In 1960 the period had fallen to 6.2 months; in 1970 the figure was 4.5 months.
"The best estimate I can make for 1981," says Windecker, "is 4.4 months."
Nonetheless, the domestic carmaker's practice of boosting prices every three months has run smack into a wall consumer shock and distrust. The projected GM increase is the fourth price boost by the company on its 1981 cars, with the cumulative rise since last fall more than $900.
Many observers were stunned by the GM price boost in an unstable market and at a time when Ford, Chrysler, and the United Automobile Workers are pressing for US curbs on the import of Japanese cars.
Opponents of such a move argue that if Japanese cars are kept from coming into the US, consumers will pay even higher prices for the autos.
The final word is yet to be heard from GM --