But Toyota just barely raised the price of the Camry. This is his 32-year actual price increase compared to his CPI for new cars.
Written by Wolf Richter for WOLF STREET.
A special proprietary non-adjusted WOLF STREET Real-World New-Vehicle Price Index, more precisely the F-150 XLT and Camry LE Price Index, for the 2023 models. The F-150 XLT is just above the XL model (lower end of the F series). High-end F-series models can cost more than double the XLT. When the Camry L was discontinued, the Camry LE became the lower end of the Camry line. The F-150 XLT and Camry LE both date back to 1990 or later and are both best sellers, so we use them for our index.
I used the base version of these models, with no add-ons, no shipping destinations and shipping charges, to show the price increase of the best-selling trucks and best-selling cars in the US dating back to 1990. Compare this to his CPI on a new car.
The chart below shows the manufacturer’s suggested retail prices for each model year of the F-150 XLT (red, left scale) and Camry LE (purple, left scale), as well as the new car consumer price index (green, right scale). I’m here. We’ll get into the details and numbers shortly.
1990 onwards:
- F-150 XLT MSRP: +231%
- Camry LE MSRP: +77%
- New car CPI: +43% (including an 18% increase over the last 24 months).
F-150 XLT price hike for 2023 is deafening, about +10% each year compared to the 2022 and 2021 models, for the second year in a row, the total blow price spike. For the two model years 2021 through 2023, the base suggested retail price, excluding destination and shipping, is $7,540, or 21%, from $35,400 for the 2021 model to $42,940 for the 2023 model. I jumped up. Time for a buyers strike, right?
This is the whole idea of inflation. Manufacturers think people will pay as much as they paid as much as they did last year.
Ford has been whining about its increasing cost all year and has used this whining as a reason to raise retail prices – the manufacturer’s inflation-mindedness. media attention. But not much ink was spilled on his second straight year of explosive price increases for his regular F-150 XLT, a truck the average American should be able to afford.
In contrast, Toyota has increased the price of the 2023 Camry LE by 2.6%. After up just 1% the year before, it’s now $25,945 without destination and shipping.
Trucks are very profitable for dealers and automakersThe problem is, automakers figured this out long ago. Americans don’t mind paying through their noses for big equipment while letting automakers and dealers pocket huge profit margins.
But when it comes to cars, suddenly they’re so price sensitive that no one wants to make a profit.And that’s why Camry’s MSRP until 2000 was on The F-150 XLT is now 40% below that!
this time last year, it was havoc. Supply chain disruptions disrupted production plans and delayed the ramp-up of 2022 model year production. The whole thing was complete chaos. He delayed the update until November 20th, but still got only the rumored price of the F-150 XLT. This is what was circulating among dealers, a resentful dealer told me, and it turned out to be very low.
Dealers were putting big extra stickers on a few 2021 trucks at the time, and suddenly the MSRP was the lowest price instead of the highest. Never in my life have I seen anything this crazy. Why was the dealer able to do that? People were paying anything because they could, so the idea of inflation took over.
The turmoil has calmed down somewhat this year. Offensive addendum stickers are almost gone. Some of his 2023 Camrys are arriving at dealers. The first 2023 F-150 model he could arrive in November.
CPI for new cars rose 10% year-on-year According to the Bureau of Labor Statistics, it was +7.3% in the 12 months through August, finally reversing some of the price gains. However, these CPI increases were from a low base that had not increased at all for 20 years due to ‘hedonic quality adjustments’.
Adjusting the hedonic quality makes conceptual sense. Comparing the current model F-150 with the 1990 model F-150 reveals that they are the same vehicle in name only. The new model is bigger and more powerful (the base engine is a 290-horsepower He’s a 3.3L V6 with a silky-smooth electronic 10-speed automatic transmission). Good gas mileage (EPA rates the 2022 model at 19 mpg in city and 24 mpg on the highway) and all manner of safety features including 4-wheel disc brakes (as opposed to drum brakes in the rear) ), plus anti-lock brakes, multiple airbags and all sorts of passive safety systems. The new model is loaded with useful features (among many other features, note the 8-inch “productivity screen” in the instrument cluster). It has 17-inch aluminum wheels, and a plethora of other things his 1990 buyers never dreamed of.
New Car CPI attempts to calculate the price change of a new car. Same product with time. If a product is significantly improved, like a car, CPI estimates the cost of those improvements each year and removes them from the index. My intuition tells me that these “hedonic quality adjustments” make conceptual sense, but are exaggerated.
As a result, CPI new car sales have grown by only 21% since 2000, driven almost entirely by the 18% increase over the past two years. The last two years for the consumer price index make sense.
but it’s more complicatedAs a result, the CPI for new vehicles has increased 21% since 2000, and the price of a basic Ford truck jumped 121% from $19,410 in 2000 to $42,940 in 2023 over the same period.
Since 2000, “median household income” has increased 75% from $50,732 in 2000 to $88,590 in 2021, according to the Census Bureau. This has moved these new trucks out of reach of more consumers.
The Camry, on the other hand, has gotten bigger, more powerful, and in a myriad of ways better, but its price has risen “only” 27% since 2000. more affordablePrice increases since 2000 have not significantly outpaced the 21% increase in new car CPI.
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