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Bureau of Labor Statistics > Producer Price Indexes > Methods > Quality Adjustment

Report on Quality Changes for 2021 Model Vehicles

In accordance with usual practice, most new-model-year passenger cars and light motor trucks were introduced into the Producer Price Index (PPI) with the release of data for October 2020.

Passenger Cars

The value of quality changes for a sample of 2021-model-year domestically produced passenger cars included in the PPI for October averaged $86.97, according to estimates by the U.S. Bureau of Labor Statistics (BLS). This change represents 27.9 percent of the average $311.88 increase in manufacturer invoice prices for 2021 models compared with models from the prior year.

The retail equivalent value of these quality changes averaged $92.39, representing 31.8 percent of the average $290.78 over-the-year increase in manufacturer suggested list prices.

The $92.39 estimated retail value of quality change breaks down as follows:

$86.45 for improvements to safety equipment, such as sensors and active safety features.
$5.94 for other changes such as changes to powertrains, infotainment systems, and changes in levels of standard or optional equipment.

Light Trucks

The value of quality changes for a sample of 2021-model-year domestically produced light trucks included in the PPI for October averaged $335.64. This change represents 62.2 percent of the average $539.46 increase in manufacturer invoice prices for 2021 models compared with models from the prior year.

The retail equivalent value of these quality changes averaged $360.78, representing 78.5 percent of the average $459.50 over-the-year increase in manufacturer suggested list prices.

The $360.78 estimated retail value of quality change breaks down as follows:

$147.74 for improvements to powertrains.
$28.53 for improvements to safety equipment, such as sensors and active safety features.
$184.51 for other changes such as improvements to infotainment systems and changes in levels of standard or optional equipment.

For technical information regarding quality changes for 2021-model-year motor vehicles, contact Jonathan McQuade at McQuade.Jonathan@bls.gov or (202) 691-7747. For general PPI information, contact the PPI Section of Index Analysis and Public Information, at ppi-info@bls.gov or (202) 691-7705.

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Estimates of the value of quality change are based on a review by the BLS of data supplied by producers for similarly equipped 2020 and 2021 domestic models priced for the PPI. Most of the estimates of quality changes in this release are derived from information supplied for the PPI for October. These data also form the basis of the new vehicle quality adjustment 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 13, 2020