Average vehicle price may hit $50,000 in 10 years, expert says
New federal fuel-efficiency standards are going to increase the average price of vehicles to $50,000 in the next decade, according to a veteran auto industry analyst.
Sean McAlinden, executive vice president of research and chief economist at the Center for Automotive Research in Ann Arbor, spoke with Bridge Magazine in advance of CAR’s four-day Traverse City Management Briefing Seminars this week.
McAlinden said Toyota and Volkswagen are performing well among the auto companies, but their profitability is still below companies in other industries.
Melanie Maxwell | AnnArbor.com
McAlinden predicts new fuel efficiency standards that will require cars and trucks to get a combined 54.5 miles per gallon will raise costs by $6,000 a vehicle by 2025 — thanks in part to exotic materials that are lighter and cost more.
McAlinden also said the auto industry in the U.S. — although still on the rebound — will likely never return to the 17 million in vehicle sales it experienced a decade ago.
He predicts the peak will be sales of 15.8 million vehicles in 2016, followed by 15.7 million in 2017. That number will continue to dip in 2018 and 2019, he said.
But Michigan, he said, will add 33,000 auto jobs from the end of 2011 through the end of 2015.
“The bailouts kept Detroit as the center of the auto industry,” McAlinden told Bridge Magazine. “It certainly is the technical center with 45,000 engineers.”
Read the full Q&A — including McAlinden’s thoughts on electric vehicle sales, skill shortages and autonomous vehicles — on Bridge Magazine’s website.
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Stuart Brown
Thu, Aug 9, 2012 : 3:09 a.m.
Ok, $50,000 10 years from now is worth about $37,000 today. Does anybody doubt that gas will be over $5 per gallon 10 years from now? The article acts like doubling the gas mileage of cars is not worth anything to the consumer. Pure bunk; the total cost of ownership will be less in 10 years relative to incomes.
JRW
Tue, Aug 7, 2012 : 10:36 p.m.
Why would these cars that get 55 miles per gallon cost an average or $50,000, when there are many cars in Europe that get that mileage right now that cost far less?
SEC Fan
Wed, Aug 8, 2012 : 4:02 p.m.
@ Rizzle...actually cars are not more expensive in (most of) Europe. Price differences tend to be currency exchange rate dependent, but even with that, it's very comparable. for example, BMW 328i in U.S. MSRP is $36,500. In Germany it's $38.846. BMW 528i in U.S. is $47,500. In Germany it's $46,753 These are at today's exchange rate.
Rizzle
Wed, Aug 8, 2012 : 1:50 p.m.
and in Europe, cars are more expensive!
Middle America
Wed, Aug 8, 2012 : 11:11 a.m.
Actually, yes, southyoop. You seem to not know very much about Europe.
southyoop
Tue, Aug 7, 2012 : 11:09 p.m.
Europe...now there's a model for ya, eh?
Linda Peck
Tue, Aug 7, 2012 : 8:53 p.m.
Wow, that is really negative thinking! I will refuse to believe this and definitely refuse to pay that kind of money. In the future, hopefully we will have learned how to do things better than now and that will change everything.
southyoop
Tue, Aug 7, 2012 : 11:07 p.m.
It'll all be great....you won't have the right to refuse or choose anything. The lefties will continue to tell you what's "best for you".
jim
Tue, Aug 7, 2012 : 7:38 p.m.
And forty years ago they promised us flying cars by now. All these articles speculating about what the future may bring exist solely to advance the point of view of the writer.
flexorz
Tue, Aug 7, 2012 : 6:26 p.m.
I'm not sure if this is a scare tactic by Bridge Magazine in using the $50,000 figure, but this $50k would be the average price (although I do agree with another commenter that the median price would be of more use, but then again, using the average price in the headline may get more attention) - with the article clearly stating that it will increase the cost per car by $6k. Thus, if you are driving a $20k car today, it would be $26k in 10 years. I'm not sure if this accounts for inflation, but when you actually read the article and understand it (quite the novel concept, I know) it really isn't as bad as the headline makes it out to be. Simply put - A car will cost approximately $6k more in ten years than it does today. Do you drive a $44,000 car today? If so, then that same car will cost $50k in 10 years.
Rizzle
Wed, Aug 8, 2012 : 1:46 p.m.
So I read the real article and the $50k is $40k in today's dollars. So if we assume the $6k is in today's dollars that means today's average car is $34k and will rise to $40k in terms of 2012 dollars. So the median is probably somewhere in the low 30s and will rise to mid $30s - in 2012 dollars.
xmo
Tue, Aug 7, 2012 : 6:21 p.m.
Thank Goodness we have more Oil reserves than Saudi Arabia or else we would be in trouble. Now the problem is letting us get it! It looks like only the RICH Progressive will be driving in 10 years! Not the working Family!
harry
Wed, Aug 8, 2012 : 5:06 p.m.
mixmaster You can ride on public transportation. Not me. Ever.
mixmaster
Tue, Aug 7, 2012 : 8:06 p.m.
All the more reason you should be in favor of better public transportation. That is unless you're rich like your guy, Rmoney. Then you could put an elevator in your garage for your Cadillacs!
Top Cat
Tue, Aug 7, 2012 : 5:23 p.m.
And remember that the next time Obama and Stabenow feed us all their crap about standing up for middle class and working class families.
mixmaster
Tue, Aug 7, 2012 : 8:08 p.m.
Still listening to the crazy ranting and raving of Glenn Beck?
jim
Tue, Aug 7, 2012 : 7:42 p.m.
That's a sound bite provided to them by their puppetmasters, Soros & Co.
mixmaster
Tue, Aug 7, 2012 : 5:28 p.m.
I've never heard the Koch brothers say anything about standing up for middle and working class people. When they're in charge of their puppet Rmoney, I bet we'll never hear it then either.
mixmaster
Tue, Aug 7, 2012 : 5 p.m.
The more that the anti government crowd whines about paying taxes and with the wealthy doing their best to cut and avoid paying them (Rmoney?) the less that public services like Fire, Police, Schools, Utilities, Transit etc., will have to use for average folks. It's diabolical how they have got this figured out. Cutting taxes results in fewer services for average folks. The wealthy will live in gated communities with their own private services using the money not spent on taxes on themselves. The rest of us will just have to make do with low quality schools, safety services and public infrastructure because they wealthy will have their own and put the price of those services out of reach for the rest of us! Subsidies and tax breaks for some of the wealthiest corporations or subsidies for ways for average people to get around when they can no longer afford cars or fuel. Your money spent on you, or for corporate profits and executive golden parachutes. You choose.
Macabre Sunset
Wed, Aug 8, 2012 : 3:35 a.m.
Oh, since when is my guy Romney? He's right about a few issues, but he is still a Republican. One way to tell someone who is so extreme that his mind will never be open to new ideas is if he assumes you're with the opposition if you dare criticize his favorite on any issue.
Bryan Ellinger
Tue, Aug 7, 2012 : 11:45 p.m.
Put more than one iron in the fire: ride a bike to a defense-related job. :-)
mixmaster
Tue, Aug 7, 2012 : 8:05 p.m.
You're right Bush didn't cut spending. At least for the stuff he didn't want to cut. Like two unnecessary wars based on lies, that were not accounted for in the budget and added several trillion $$ to the debt and thousands of lives lost. President Obama is attempting to pay off the Republican credit card debt and set things right, getting no help from Republicans. And now your guy, Rmoney wants us to go back to the Bush era... on steroids. Once again, I'd prefer my taxes to be spent on helping average folks like you and not on corporate tax breaks, executive salaries, golden parachutes, more tax cuts for the wealthy, like Rmoney, who are not creating jobs.
Macabre Sunset
Tue, Aug 7, 2012 : 7:05 p.m.
For that matter, it is interesting to see Keynesians making the trickle-down argument. Quick question, though, what percentage of the internet backbone is provided by the government?
Macabre Sunset
Tue, Aug 7, 2012 : 7:03 p.m.
It's hard to argue with someone who believes Bush cut government spending.
mixmaster
Tue, Aug 7, 2012 : 6:40 p.m.
So, where are the jobs? After all the tax cuts and breaks for corporations, where are the jobs? We've had the worst "recesssion" since the 30's and plenty of tax and spending cuts in the last dozen or so years. Kinda blows your assertion out of the water. Inflation is incredibly low and yet the recession hangs on despite the stimulus, despite the Feds action. Except for ONE year, I have no idea how you know how much Rmoney has paid in taxes since he won't tell us. Government spending doesn't add to the economy? Oh really? Government spending adds plenty to the economy. The Internet (DARPA), NASA comes to mind, military contractors on the government dole, Social Security, military pension, grants (tax money coming back) to the states for roads, bridges, airports, the Internet, to name a few. All this money gets pumped back into the economy and not much of it goes to Swiss bank accounts and offshore tax havens like Rmoney's does. If only he would tell us...
Macabre Sunset
Tue, Aug 7, 2012 : 5:41 p.m.
I get that a lot of people have become Keynesians these days, but the evidence is fairly clear that massive public spending and regulation leads to inflation or recession. When you make the few who provide jobs the villains and you make the government the hero, what exactly are you hoping for the economy? Government spending does not add one dollar to the economy. Romney pays much more in taxes than I do. If he were here, I'd thank him for his contribution, not hate him for it.
Richard
Tue, Aug 7, 2012 : 4:27 p.m.
It "may" happen. A lot of things "may" happen in ten years.
Rizzle
Tue, Aug 7, 2012 : 4:22 p.m.
I'd much rather know the Median Vehicle price - now and in the future, not the average. It may very well end up being the same or close, however, knowing the median will let me know if the average is skewed by very high priced luxury cars. I'm willing to bet the median is lower than the average.
Piledriver
Tue, Aug 7, 2012 : 4:01 p.m.
$50,000.00!!....You used to be able to buy a pretty nice house for $50,000! I guess it's kind of ironic, because the way this global economy is working out for us Americans, we'll all soon be living in our cars anyhow (or an appliance box). As Chris Farley's charater on SNL would say..."I'm livin' in a van down by the river!"
Pappa
Tue, Aug 7, 2012 : 3:57 p.m.
I'll probably be driving a 2012 vehicle by 2025.
drut_ferguson
Tue, Aug 7, 2012 : 3:54 p.m.
So the average cost of a car now is $44,000? I can't afford that much! I guess I'll never be able to buy a car again! Or, you know, somebody could just explain to me what "average vehicle price" means.
Bryan Ellinger
Tue, Aug 7, 2012 : 11:39 p.m.
There are three common averages: mean, median, and mode. http://goo.gl/WBRU
SonnyDog09
Tue, Aug 7, 2012 : 3:43 p.m.
This is all part of the dear leader's cunning plan to make us all dependent on Public Transit and the Public Employee Unions that will operate the trains and buses.
Middle America
Wed, Aug 8, 2012 : 11:15 a.m.
Yeah, Europe is doing incredibly bad in every imaginable way. That is, if you only get your news from the cable TV you had installed in the hole in the ground you have been hiding your head in.
southyoop
Tue, Aug 7, 2012 : 11:04 p.m.
Doesn't matter....white or black...socialism in his extreme degree doesn't work.....See Europe
bobslowson
Tue, Aug 7, 2012 : 5:55 p.m.
@ Richard...they didn't say anything...because Bush is a white male. You never heard so much outrage until a black man was president
Richard
Tue, Aug 7, 2012 : 4:30 p.m.
It is amazing that people make comments like that. Why would anyone in their right mind think that the president has some secret plan to makes us dependent on anything ? What did they say when the same things were happening while Bush was President ?
Ron Granger
Tue, Aug 7, 2012 : 4:17 p.m.
Shocking newsflash - you are already dependent on the public roads.
mixmaster
Tue, Aug 7, 2012 : 3:50 p.m.
I suppose you'll be walking then?
lisaone
Tue, Aug 7, 2012 : 3:31 p.m.
I feel so bad for the future America. I know many don't get cost of living raises anymore (including myself), so either in the future the wages will be much higher so it is all "relative", or something better give. Who is going to be able to afford that extra car, let alone one. My feeling is, why give us this scare now? It's hard enough to get through to tomorrow for many of us. Give us something positive for the future, not more gloom and doom.
Jake C
Fri, Aug 10, 2012 : 1:35 a.m.
It's not a 'scare', it's the reality that most people choose to ignore. Fossil fuels are a limited resource. Either we rapidly learn to adapt to new methods of fueling our energy needs, or we face an really, really unpleasant transition period.
Superior Twp voter
Wed, Aug 8, 2012 : 3:32 a.m.
The new Obamaville.
mixmaster
Tue, Aug 7, 2012 : 3:56 p.m.
This is a scare tactic to make the masses feel despondent so they'll do whatever they're told by the wealthy and powerful, which is NOT the government OR President Obama. All this political noise, ie the Tea Party and their supporters, is having its desired effect. To try to make us worried and despondent so we look to them (Rmoney, Koch brothers etc) for our salvation and not ourselves. After all, once they have dismantled the government, do you really think that they're going to look out for your interests? Don't fall for it. Don't get duped. You have a voice and a vote for a positive future.
mixmaster
Tue, Aug 7, 2012 : 3:51 p.m.
Believe it or not, this is a positive. It's only a negative if you think that things will never change.
golfer
Tue, Aug 7, 2012 : 3:28 p.m.
hello bus
Ron Granger
Tue, Aug 7, 2012 : 3:27 p.m.
"Peak vehicle use" has passed. "Peak vehicle buying" has passed. People are driving less, especially young people. Gas prices will continue to increase, even as oil companies have record profits. We need to end taxpayer subsidies of gas prices. Other people subsidizing your cost of gas is not your socialist birthright. We need alternatives to gas guzzlers. We need roads that are safe for pedestrians and cyclists.
southyoop
Tue, Aug 7, 2012 : 11:03 p.m.
Hey Ronnie....Can you spell A_M_T_R_A_K?
mixmaster
Tue, Aug 7, 2012 : 4:49 p.m.
Subsidies and tax breaks for some of the wealthiest corporations or subsidies for ways for average people to get around when they can no longer afford cars or fuel. Your money spent on you, or for corporate profits and executive golden parachutes. You choose.
Ron Granger
Tue, Aug 7, 2012 : 4:15 p.m.
You are confusing subsidies for the most profitable corportations in the history of the world with subsidies for non-profits that burn less fuel per person and result in less road congestion.
Brad
Tue, Aug 7, 2012 : 4:10 p.m.
How about other people subsidizing 80%+ of your bus ride? But I bet you're fine with that, right?
dconkey
Tue, Aug 7, 2012 : 4:05 p.m.
Mr. Granger, I will be all for ending taxpayer subsidies for gas prices, when public transportation stops taking tax money and can survive on its own revenues.
mixmaster
Tue, Aug 7, 2012 : 3:25 p.m.
Only rich people will be driving cars. This is the reason why us peons should all support better public transit and bicycle routes. But that won't happen because the rich are only interested in paying lower taxes thus depriving the rest of the public (US!) a way to get around. It's only about them. They'll have their cars and be able to afford fuel and the rest of us will be hoofing it.
harry
Wed, Aug 8, 2012 : 5:03 p.m.
I will NEVER ride on a smelly bus with smelly people. I will pay $8 per gallon to have my freedom to drive where ever I want to .
smokeblwr
Tue, Aug 7, 2012 : 3:13 p.m.
Dramatically increased vehicle prices due to left wing imposed efficiency mandates? This is bad news....for Obama.
Jake C
Fri, Aug 10, 2012 : 1:32 a.m.
No, "Dog Guy", the earth does not "produce" methane & petroleum, it has a limited amount stored beneath its surface that will eventually be unsustainable to extract based on cost.
JRW
Tue, Aug 7, 2012 : 10:40 p.m.
I agree with Ron Granger. "Why should other people subsidize SUV trips to the corner store for milk?" Exactly right. You choose to drive a gas guzzler, you pay out of your own pocket for the $8/gallon gas that will come in the next decade, if not sooner.
Dog Guy
Tue, Aug 7, 2012 : 6 p.m.
Be of good cheer, Ron Granger, the world is not running out of oil; Earth continues to produce both methane and petroleum..
Ron Granger
Tue, Aug 7, 2012 : 3:23 p.m.
Right - let's pretend the world is not running out of oil. Without taxpayer subsidies, gas would close $6-$8/gallon. Why should other people subsidize SUV trips to the corner store for milk?