Buyers at General Motors, Chrysler, Nissan and Hyundai paid record amounts for new vehicles during May, according to True Car.com, which tracks statistics about buying habits.

True Car bases its calculations on transaction prices: the final amount people pay, after incentives, bargaining and trade-ins. The numbers include the whole range of vehicles that the companies sell, such as  cars, sport utilities, pickups, and minivans.

Transaction prices are way up since the beginning of 2010. Take a look at this chart by Meg Cramer of Changing Gears, which shows the industry average and what consumers at major carmakers are paying.

Transaction prices are rising because automakers have aligned their production with customer demand, eliminating the necessity for big incentives, said Jesse Toprak, vice president of industry trends and insights at True Car.

“The auto manufacturers have found their sweet spot,” Toprak said.

Higher transaction prices are good news for Midwest communities that have car and parts plants, because it generally means steady or increasing sales. If transaction prices were to drop dramatically, it could mean problems for the industry that might translate to production slowdowns or even layoffs.

Overall, consumers paid an average of $30,091 for a vehicle in March, just a little below the record set in November. That’s up $1,977 from a year ago, and up $143 from last month.

At GM, the average transaction last month was $33,289, according to True Car. That’s a big jump for GM compared where it was two summers ago, before it had introduced vehicles like the Chevrolet Cruze and Volt, and while it was still closing some of its factories.

Chrysler’s average transaction price, $29,842, is the latest leap for the company, whose sales essentially stalled when it was dealing with bankruptcy three years ago.

For Nissan, its $28,322 March transaction price is up almost $2,000 in just a year. Nissan is on a sales roll, and has gotten plenty of attention for its electric Leaf.

At Hyundai, buyers are paying less than at the other players, an average of $21,717 in March. But that still puts Hyundai into the $20,000 and up category, after months in which its vehicles sold in the teens of thousands.

If anything, the chart is good news for car dealers and communities, and maybe not such good news for bargain hunting consumers. But, True Car and plenty of other sites on the Web offer car buying tips.

Have you been car shopping recent? What’s been your experience on prices?

This morning, Honda said it will invest $98 million at its engine plant in Anna, Ohio, the one you’ve probably driven by Interstate 75. The investment comes on top of a $120 million investment at Honda’s transmission plant in Russells Point, Ohio.

The money is going to build a new engine and transmission family called “Earth Dreams.” The transmission plant will make what are called Continuously Varying Transmissions, or CVTs, which don’t have gears but shift up and down smoothly, and the engine plant will produce parts for those transmissions.

“Earth Dreams” will be available for the first time in the United States on the 2013 Honda Accord, which will be built at Honda’s assembly plant in Marysville, Ohio.

Honda’s goal is to increase its sales this year by 20 percent, and it has aggressive plans over the next few years for both its Honda and Acura lineups. Its push is getting kicked off during the Super Bowl this weekend, which, just in case you haven’t seen it, will feature this familiar looking ad.

Speaking on Inside INdiana Business Television last week, Daniels said he was frustrated that his state was losing opportunities to compete for projects to other states that had Right to Work laws, which prevent unions from collecting mandatory dues.

Mitch Daniels Talks About Right to Work

One such project, according to the governor, was the assembly plant that Volkswagen recently opened in Chattanooga, Tenn. “I couldn’t get VW to return our call,” the governor said. “We’ve won on Honda, we won on Toyota, we’re clearly the fastest growing automotive state, and we couldn’t even get them to talk to us.”

Daniels. by the way, is giving the Republican response tonight to President Obama’s state of the union address.

Daniels was referring to Honda’s assembly plant in Greensburg, which opened in 2008, as well as Toyota’s two production sites. Toyota builds vehicles at its own plant in Princeton, and shares production with Subaru at its plant in Lafayette.

Tony Cervone, a spokesman for Volkswagen of America, declined comment via email.

Daniels’ decision to support a Right to Work law has caused an escalating debate in Indiana. Democratic lawmakers initially refused to attend hearings, even in the face of $1,000 a day fines.

Daniels said in the interview that their protests are justified. “Both sides ought to be heard from. I think the Democrats are within their rights to make a gesture of how strongly they felt, and to say let’s stretch this out a little further. It’s a good process and we’ll accept whatever outcome that comes.”

As the debate continues, companies like Remy International in Pendleton are weighing whether to invest in Indiana, or move elsewhere. Stateline.org looked at the situation for Indiana’s companies and its political future.

Carmakers are rolling out dozens of new models at the show, ranging from Cadillac and Chevrolet, to Ford and Lincoln, and German automaker BMW.

Japan’s two struggling giants, Honda and Toyota, hope to make a comeback in 2012 after dismal results in 2011.

The auto show always features splashy introductions. Here’s a look at the new Ford Fusion from our friends at Michigan Radio.

Are you visiting the show? Do you some favorites?

Critics noted the newest Civic was made from cheaper materials, had slower braking capability compared to its predecessors and failed to receive “recommended” status from Consumer Reports.

Tetsuo Iwamura, chief executive of American Honda Motor Co., made the announcement during an appearance in Detroit on Tuesday. The move comes as part of Honda’s ambitious goal to lift U.S. sales by 24 percent in 2012. Civic sales have been trending in the opposite direction.

U.S. sales of the Civic have fallen 13 percent this year to 200,690, according to researcher Autodata Corp, while Honda’s overall market share in the U.S. dipped one percentage point to 9 percent.

In the past, claims to the compact car market was essentially a two-company race between Toyota and Honda. But two natural disasters disrupted production this year, and competition from the domestic automakers has intensified. The Ford Focus and Chevrolet Cruze have been gaining traction. And combined share for South Korean automakers Hyundai and Kia has risen to 9 percent, up from 7.8 percent in the same time period, according to BusinessWeek.

“The competition will continue to intensify,” Iwamura told The Detroit News. Typically, automakers will wait at least three years before redesigning a model.

In August, David Campion, senior director of Consumer Reports’ auto test center, said that the ’12 Civic “ranks near the bottom of its category.”

1. Angry residents confront Emanuel. Chicago mayor Rahm Emanuel sought solutions for the city’s budget woes during a public meeting Monday night. He got more than he bargained for, according to reports from our partner station WBEZ. A question from a laid-off traffic employee led to an extended back-and-forth with union members in the audience. “I’m responsible to the city taxpayers and the city residents,” Emanuel said, referring to a projected $635 million budget deficit. Audience members yelled that they were taxpayers too.

2. Honda renovates Ohio plants. Honda announced Monday it would spend $355 million to refurbish four plants in Ohio, according to The Columbus Dispatch. The improvements come as the automaker returns to full production following the Japanese catastrophes. The Dispatch reports some jobs will be added, but specifics are not yet available. Honda has more than 13,000 employees in the Buckeye State.

3. Lawmakers seek tax-credit extension. Tax credits for advanced battery manufacturers in Michigan are scheduled to be phased out by Gov. Rick Snyder, but Democrats in the state Legislature want to extend the incentives packages. The Associated Press reported Monday that the Democratic proposal would include tax credits for battery production and facility construction, as well as credits for buying electric vehicles and charging stations.

It ranked behind General Motors and Ford in May auto sales. It’s the  first time the Detroit Three have been the Big Three since February 2006, according to Edmunds.com, a Web site that offers car-buying advice.  During its worst days, such as its 2009 bankruptcy filing, Chrysler fell as low as fifth in the industry, outsold by Toyota and Honda as well as its Detroit neighbors.

Photo by Ricardo Giaviti via Flickr.

The gain isn’t only because Chrysler’s sales have rebounded, although the company has received an image boost in recent months.

The return of the Big Three is in large part due to weakness by Japanese auto companies. They had a terrible month, in part because of disruptions caused by the Japanese earthquake and tsunami.

Sales at Toyota dropped 33 percent from a year ago, while Honda was down 22.5 percent and Nissan was down 9 percent. Hyundai and Kia, combined, came within a thousand vehicles of outselling Toyota. Honda failed to put a vehicle on the top-selling list for the first time that anyone can remember.

Last month, eight of the top 10 selling vehicles in the United States were from Detroit automakers, reported Nick Bunkley in The New York Times. That compares with four of 10 a year ago. The country’s best selling car in May, long the Toyota Camry, was the Chevrolet Malibu.

Says Justin Hyde at Jalopnik.com,

“And for one month, General Motors, Ford and Chrysler can reclaim the mantle of the “Big Three,” which had until now been stored in a government warehouse next to the Ark of the Covenant. It’s expected to return to its resting place within a few months.”

That’s one of the questions that states are wrestling with as they try to shake off the recession and move forward. And, it’s a story the Changing Gears team will be examining many times in the next few years.

The latest state to deal with the issue is Missouri, whose governor has signed controversial legislation meant to keep a Ford Motor Company plant from leaving the state. I talked about the situation this week on KMOX in St. Louis.

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The incentives for Ford, worth as much as $100 million, are part of broader legislation called the Missouri Manufacturing Jobs Act. The governor signed the measure on Thursday at United Automobile Workers union Local 249, which is near Ford’s factory in Claycomo, outside Kansas City.

The centerpiece of the measure is a package that Ford would receive, if it invests in the Claycomo plant, and maintains or increases jobs there. The Claycomo plant has 3,700 workers, and is one of the biggest automobile plants operated by a Detroit automaker in the United States.

Proponents of the idea said they had no choice. If Missouri didn’t live up to its name as the “show me” state, Ford might not think it was wanted. Opponents, who staged a filibuster that delayed the bill from passing the state Senate, argued Ford would probably do what it needed to do, anyway.

History was on the opponents’ side. Four years ago, Ford idled a factory outside St. Louis, even though state politicians pulled many strings to keep it open. And, since 1980, automakers have closed 128 factories in the United States, from California to Massachusetts. St. Louis, which once had four big car plants representing each of the Detroit automakers, has been especially hard hit, losing parts jobs as well as assembly line jobs.

Despite the deal, there is no guarantee Ford will take advantage of Missouri’s offer. In fact, Ford essentially remained silent through the Missouri legislation’s debate over the bill.

Does that mean incentives are a waste of time? Do they ever work?

Certainly, in some cases, they do. Ohio is undoubtedly glad that its former governor, James Rhodes, offered $5 million in incentives to Honda Motor Company back in the 1970s to convince it to build a motorcycle plant in Marysville. That factory has led to two automotive assembly plants, an engine plant, and a technical center with thousands of engineers.

I was allowed to make a rare visit to the Honda engineering center a few years ago, and was amazed at how big it was. It took more than two and a half minutes just to walk from one end of the engineers’ development lab to the other.

Likewise, Alabama‘s rise as an automobile state can be directly traced to lawmakers’ decision to offer Mercedes-Benz a package worth $300 million, then the richest deal ever. Since the Mercedes plant opened in 1997, Alabama has attracted Honda, Toyota and Hyundai, and Mercedes has doubled the size of its factory.

As in Alabama, Kentucky has had a good track record in using incentives. Its biggest victory was the Toyota factory in Georgetown, which has attracted dozens of Japanese investments. But the recession has caused those to slow down.

And so, the state has come up with a new wrinkle in the incentive wars. It recently announced a program called the Kentucky Reinvestment Act that would offer training funds to its existing companies, regardless of whether they add jobs. In order to qualify, companies simply have to promise to invest $2.5 million in Kentucky facilities and retain at least 85% of their existing workers.

That kind of aggressiveness may leave states little choice which briefcase to pick. It may have to be the one with the cash. And, for states in the Manufacturing Belt, which already are facing tight budgets, there may be some tough choices ahead.

What do you think of states competing for jobs with incentive programs? Do they do it too much or not enough? What other kinds of ideas might help a state move forward?