November 30, 2004 (The Editor’s Desk is updated each business day.)

Quality changes in 2005 model vehicles

The value of quality changes in 2005 model-year cars averaged $283.12. This figure represents 73.8 percent of the average increase in manufacturers’ invoice prices. In the light truck segment, $306.26 in quality changes accounted for 75.7 percent of average increases in invoice price.

[Chart data—TXT]

The retail equivalent value of the quality changes to 2005 model-year passenger cars averaged $310.50, or 74.3 percent of the over-the-year increase in manufacturers’ suggested list prices. The retail value of the quality changes broke down to $193.11 for safety improvements and $117.39 for other quality changes, such as emission improvements, changes in audio systems, and changes in levels of standard or optional equipment.

The retail equivalent value of quality changes for domestic light trucks averaged $345.38, representing 75.2 percent of the average increase in manufacturers’ suggested list prices. The quality changes broke down to $18.30 for federally mandated safety improvements, $120.43 for non-mandated safety improvements, and $206.65 for other quality changes such as powertrain improvements, theft protection, changes in audio systems, and changes in levels of standard or optional equipment.

The analysis of quality improvements in passenger cars and light trucks is a product of the Producer Price Index program. Estimates of the value of quality change are based on a review of data supplied by producers for similarly equipped 2004 and 2005 domestic vehicles priced in the PPI. For more information, see "Report on Quality Changes for 2005 Model Vehicles," (PDF) news release UDSL 04-2351.