|The Golden Age of Cars 'n' Trucks|
|Key Words||Sales, Demand, Population, Producers, Stock Market, Interest Rates, Technical Progress, Costs, Price|
Auto sales were the second highest ever in 1998, indicating a new golden age for the industry. However, it is different from the heyday of the 1950s, when demand was boosted by a booming economy and population growth, and there were too few cars supplied.
In current times, while demand is high, there is an overabundance of cars. Demand is being fueled by the strong economy and stock market, low interest rates, and appealing features on newer models. Producers are using technical progress to design new cars quicker and more cheaply. They are also using the same parts to make different types of cars, thereby reducing costs.
The effect is that the prices of new models are not rising in spite of their new features and extras. Some, like the Jeep Grand Cherokee, are actually being reduced in price. The older models, like the Ford Taurus, are being discounted even more steeply.
(Updated February 1, 1999)
|Source||Gregory L. White, Fara Warner, and Joseph B. White, "Competition Rises, Car Prices Drop: A New Golden Age?", The Wall Street Journal, January 8, 1999|
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