Rising Auto Profits and What Cars Cost

"Chrysler Reports Record Earnings of $3.7 Billion in 1994" (Jan. 18) failed to report that sales are down compared to previous years. The auto makers have realized that by reducing production, they increase demand, because they have fewer vehicles to sell. This strategy has increased profitability for all the auto makers.

Twenty years ago, average Americans paid approximately 10% of their salary to keep a car. Now we spend about 20% of our before-tax income. AAA, in a 1992 report, stated that average total ownership costs of a new car are $5,820 per year. The median American income is somewhere around $35,000 before taxes.

I'm convinced that if these trends continue, the average American will be unable to afford to purchase a car 20 years from now. The auto makers have shown that they can sell fewer cars to make more profits.

If I had grandchildren, I would be concerned.


San Diego

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