ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, September 28, 1996 TAG: 9609300017
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
DATELINE: DETROIT
SOURCE: Associated Press
INCREASES on most 1997 models have stayed below 2 percent, and automakers have introduced lower-priced versions of cars such as the Ford Taurus.
Prices on 1997 models are signs that automakers are beginning to respond to consumer concerns about the high prices of new cars.
Most automakers have managed to keep their price increases on 1997 models below 2 percent. Ford Motor Co. also has introduced lower-priced versions of its Taurus sedan and Windstar minivan to boost sales.
A new base version of the 1997 Windstar will go for $18,995, which is $1,175 less than the lowest priced 1996 model. The new model offers less trim, no luggage rack and a smaller engine.
Windstar sales have suffered since Chrysler Corp. last year began selling its new generation of minivans, which offer a driver-side rear door that its competition lacks.
In May, Ford began selling a lower-priced version of its Taurus sedan at $18,545, compared with the previous low of $19,150 for the base Taurus GL. But the Taurus, which also is being offered with a $1,500 rebate, faces new competition from the '97 Camry, which starts at $16,398.
David Andrea, an analyst with Roney & Co., said he expects more attempts to lower prices in the wake of the Camry.
``That has been such an icon and benchmark, that the other manufacturers are going to look to Toyota for price leadership,'' he said.
Analyst David Healy of Burnham Securities Inc. said Ford's recent moves were in response to increased competition and ``rather underwhelming public demand'' for two of its most important products.
The new Taurus was introduced in late 1995 with a $1,000 price increase and added features that many customers did not appear to want.
``I wouldn't say there was a strategy to go for a higher price, but there was a strategy to put in product content we thought buyers wanted,'' said Phil Novell, Ford division general sales manager.
Novell said the recent low-price Taurus entry was an attempt to broaden its appeal. He noted Ford also came out recently with a high-end Taurus, the high-performance SHO version, which lists for more than $27,000.
The price-cutting has not applied to Ford's hot-selling models. Ford last summer quietly increased prices on the popular Explorer and F-150 pickup. But with more competition in the sport-utility segment, Ford last week began offering its first lease discounts on the Explorer.
Some of the first price-cutting was seen among European luxury makes, which have increased sales this year with new models at the expense of Japan's luxury automakers.
Andrea said automakers are finding success when they can redesign models with cost-saving innovations and new features, while still keeping a lid on price increases.
``What you have is an increase in value, which should lead to increased sales,'' he said.
LENGTH: Medium: 60 linesby CNB