well when one looks at the attempt by auto makers to develop new models that are not only less expensive than the competition but ones also highly desired by customers who are becoming more concerned with safety, reliability and personal accessories. One of the biggest reasons this strategy is being continued is because it seems to be one that is working best for the foreign competition-especially where U.S. market share is concerned. For example, weak Asian markets and lower prices on imports have made all three U.S. automakers keep prices at the same level or lower than previous year models. Even though this strategy was pursued in order to compete with cheaper imports, U.S. automakers are still giving rebates because of the competition, “New car prices this spring are flat or even declining, providing unexpected deals for consumers, thanks in part to cheaper imports from Asia. Automakers who set their 1998 prices low in hopes of eliminating rebates are now offering up to $1,000 in incentives to compete with the imports” (U.S. Car Prices 1).
General Motors is the leading exporter abroad, but all three U.S. automakers suffered losses in Japan due to slow Asian markets-Big Three auto sales in Japan plummeted to 43,329, compared to 63,137 over the same period in 1997...blaming the 33-percent drop on Japan’s economic slowdown (Japan 1). In order to combat these types of global conditions, the Big Three are offering lower prices and build more value into their vehicles that comes at no extra charge to consumers. For example, GM’s Chevrolet division has set the price for its popular Silverado pickup at $15,995-a price that includes more options with a lower price tag than its 1998 model, “The new Silverado includes nearly $500 worth of additional equipment made standard compared to its C/K pickup predecessor. The base 1999 Silverado price is about $150 less than the 1998 C/K pickup” (Japan 1). Yet, added standard...