The average price for a new vehicle hit $49,500 at the end of last year, compared to $38,948 just three years earlier.
The semiconductor crisis has eased, the supply chain has loosened and vehicle production has resumed after falling off for much of the pandemic. But most of the cars and trucks rolling off the assembly lines are luxury items.
Between December 2017 and December 2022, the share of all new auto sales priced above $60,000 more than tripled, from 8 percent to 25 percent, according to research by Cox Automotive.
In the same five years, the share of sales under $25,000, a standard cutoff for economy vehicles, shrank from 13 percent to 4 percent.
“The manufacturers have been steering the market toward more expensive products,” said Charlie Chesbrough, senior economist at Cox. “All those bells and whistles, nav-screens, cruise control, all those fantastic and lifesaving technologies cost money.”
“It is no longer a $25,000, $30,000 transaction. It is a $50,000, $60,000 transaction,” Patrick Roosenberg, director of automotive finance intelligence at J.D. Power, told The Hill. “It is a greater financial commitment than it has ever been.”
U.S. automakers have walked away from economy-priced sedans because of thin profit margins and because consumers don’t seem to want them.
As a result, actual cars now make up only about one-fifth of the Detroit auto market, an industry dominated by high-priced pickups and SUVs.
The Hill’s Daniel De Visé has the full story here.
