Chrysler Says Average Prices for ’98 Models Will Be Lower

Chrysler Corp. completed the Big Three’s deceleration of prices Wednesday, announcing that the average cost of its 1998 cars and trucks will be slightly lower than this year’s models.

Ford Motor Co. and General Motors Corp. announced earlier that they would avoid significant price increases, which have long been a fall tradition.

This is the first time Detroit has held down new model-year prices since the mid-1950s, said industry sales analyst Art Spinella of CNW Marketing Research in Bandon, Ore. This year, faced with tougher competition from foreign auto makers and a softening market for cars, the Big Three had no choice.

“The industry would like to justify this by saying they have cut costs, become more efficient and learned to manage their business so they can share some of the savings with consumers,” said analyst Maryann Keller of Furman Selz Inc. in New York. “But the reality is the market determines price.

“The market has been saying for at least the last 12 months that it will not tolerate a price increase.”

Chrysler said its suggested prices will average 0.6% lower than comparably equipped ’97 models. Prices for cars will average 1.3% lower, while light-truck prices will decline an average of 0.4%. Destination charges will remain unchanged.

The averages are sales-weighted and the comparisons are with end-of-the-model-year ’97 prices. They do not include new or redesigned models that will be launched later in the ’98 model year: the Dodge Intrepid and Chrysler Concorde sedans, the Dodge Durango sport-utility vehicle and the Dodge Ram Van and Wagon.

Prices for the 1998 Dodge Viper, a high-performance sports car, and Plymouth Prowler, a retro hot rod that’s just arriving in dealerships as a ’97 model, were also excluded from the averages and will be announced later.

“This pricing reflects the realities of a competitive marketplace,” said James P. Holden, vice president of sales and marketing. “We limited model-year price increases to 2% or less in 1995, 1996 and 1997. This year, on average, we’ve more than held the line.”

Earlier this month, Ford said its ’98 prices would remain flat on average. GM announced in June that its prices would increase only an average of 1.3%--its lowest increase in more than a decade.

In New York Stock Exchange trading, shares of Chrysler fell 25 cents to close at $35.81, while GM shares rose 25 cents to close at $61 and Ford shares gained 31 cents to close at $40.75.