Auto makers, suppliers fail to profit from vehicle improvements

DETROIT (Dec. 10)—Car makers and automotive suppliers added $5,300 worth of features and options per car over the last decade, but recouped only $4,200 of that through price increases, a new report said. While consumers got $1,100 worth of free content on their vehicles, auto maker earnings, stock prices and return on capital decreased, according to the study by the Center for Automotive Research at the Environmental Research Institute of Michigan and Accenture, a management and technology consultancy. Auto makers' return on assets remained flat at about 3 percent during the economic boom while suppliers' ROA declined from 8.5 percent between 1995 and 1997 to 5.7 percent between 1998 and 2000. The value created per vehicle grew for auto makers from 28 percent to 33 percent from 1990 to 2000 while value migrated away from suppliers, the firms found