The American automobile industry is throwing away an opportunity to regain lost markets by raising prices of domestic compact and subcompact cars at a time when the dollar devaluation has forced foreign car prices way up, says White House consumer advocate Esther Peterson.
In addition, Peterson said, this action comes at a time when automobile complaints are at the top of the list of consumer gripes.
"For years American auto makers have complained of increasing import penetration into the domestic auto market," Peterson said. "Yet, now that the value of the Japanese yen has increased - and the dollar's value has decreased to relation to it - forcing up prices of Japanese cars in this country U.S. auto makers have chosen to mimic import price increases rather than hold the line and try to regain the lost market share."
In a letter to Rep. Bob Eckhardt, (D-Texas), chairman of the House subcommittee on consumer protection and finance, Peterson said the chief complaint her office receives from consumers is the high price of cars.
"I find it most unfortunate," she said, "that American auto manufacturers have failed to take advantage of the opportunity and recognized that high purchase prices only serve to heighten consumer frustrations with auto repair and warranty problems."
Peterson sent Eckhardt a copy of a newly completed report prepared by her Office of Consumer Affairs in response to current congressional hearings on auto problems.
The OCA report shows auto problems to be far and away the most frequent consumer complaint received by the office since OCA began compiling annual consumer complaint statistics in 1974.
The OCA report also cites a Harvard Business School study that claims the vast majority of dissatisfied consumers does not complain or take any action.
"The No. 1 complaint received by the OCA is concerned with automobiles," the OCA report states, "accounting for approximately 20 percent of all complaints received."
From 1974 through July, 1978, the OCA study states, "complaints relating to cars accounted for from 14 percent to 31.1 percent annually of all complaints received by OCA. In contrast, mail order complaints, consistently the second most frequent complaint, ranged fron 6 percent to 10.3 percent during the same period."