Economic News Release

Report On Quality Changes For 2010 Model Vehicles News Release


Transmission of material in this release is embargoed until                          USDL-09-1400
8:30 a.m. (EST), Tuesday, November 17, 2009

Technical information:      
  Thaddious Foster:                       (202) 691-6443  *  Foster.Thaddious@bls.gov
  PPI Analysis and Public Information:    (202) 691-7705  *  ppi-info@bls.gov  *  www.bls.gov/ppi
Media contact:                            (202) 691-5902  *  PressOffice@bls.gov  


                      REPORT ON QUALITY CHANGES FOR 2010 MODEL VEHICLES


Passenger Cars

The value of quality changes for a sample of 2010 model year domestically produced passenger 
cars included in the Producer Price Index (PPI) for October averaged $249.69, according to 
estimates by the U.S. Bureau of Labor Statistics (BLS). This change represents 30.8 percent of 
the average $811.69 increase in manufacturers' invoice prices for this year's models as compared 
with last year's models.  

The retail equivalent value of these quality changes averaged $271.42, representing 38.0 percent 
of the average $713.99 over-the-year increase in manufacturers' suggested list prices. 

Light Trucks

The value of quality changes for a sample of 2010 model year domestically produced light trucks 
included in the PPI for October averaged $(5.02).  The average increase in manufacturers' 
invoice prices for this year's models was $793.46 as compared with last year's models.  

The retail equivalent value of quality changes for domestically produced light trucks averaged 
$(2.92). The average over-the-year increase in manufacturers' suggested list prices was $752.81.  

The $(2.92) estimated retail value of quality change breaks down as follows:
      
   *    $45.50 for mandated and non-mandated safety changes such as improvements to 
        headrests and airbags.
   *    $(48.42) for other quality changes such as changes in audio systems, powertrains, and 
        changes in levels of standard or optional equipment.   

                                               ********
Estimates of the value of quality change are based on a review by the BLS of data supplied by 
producers for similarly equipped 2009 and 2010 domestically produced models priced for the 
Producer Price Index.  Most of the estimates of quality changes in this release are derived from 
information supplied for the Producer Price Index for October.  These data also form the basis of 
some of the new vehicle quality adjustments for the Consumer Price Index (CPI).  However, it 
should be noted that, effective with the release of data for January 1999, changes made solely for 
the purpose of meeting air pollution standards are no longer considered quality improvements for 
CPI calculation purposes.

Last Modified Date: November 17, 2009
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