GM to Increase Sticker Prices 1.5 Percent

Citing the rising cost of certain commodities used to build its cars and trucks, General Motors announced it will raise prices on its 2008-model-year vehicles by an average of 1.5 percent.

The increase will affect different vehicles by different amounts. Certain cars in more competitive segments, like the new Saturn Aura and the base Chevy Malibu, will avoid any price increase, while the Cadillac XLR luxury coupe will see the highest increase, $1,500. Across the board, the price hikes mean consumers will pay an average of roughly $100 to $500 more for any given GM vehicle.

GM blames rising commodity costs for the increase, pointing specifically to the rising price of steel, but steel is hardly the only culprit. Lots of oil-based products are used to make cars, and oil has seen a 45% price increase in the last year. Stack that on top of a slow automobile market domestically, and you have your price increase.

Still, GM is the only company of the Big Three to announce price increases due to commodity costs, although that may change.

The increase will also only affect vehicles that arrive at dealers after today. All cars and trucks already inventoried by dealers and on lots until at least the end of the year will escape the price hike.

GM Hikes ’08 Sticker Prices (Detroit News)

Comments

I wonder if Hummer prices are going up. A weeks worth of gasoline for a Hummer is in the hundreds of dollars, so a price increase is nothing.

I guess this is a result of GM losing $38 billion, yes that's billion. They were planning on using tax credits against future profits, however the future profits are not there and now it's time to pay the piper. If Ford or Chrysler didn't turn out so much crap over the years they, like Toyota, would be eating into GM's market share.
My neighbor just bought an Accord over the Malibu. He said he was set on buying the Malibu as he considered it equal to the Accord, however when the Sales Rep mentioned that GM was going to put more Malibu's into rental fleets to get them into the publics hands he decided he was best going with the Accord as it will retain more value.
If Honda management ran GM, GM would dominate Toyota.

Tom,

Management is only half the battle. I think the economy, gas prices and general ho-hum quality over the past couple of deecades has more influence than mangement.

Management determines the success of every company. Gas prices and the economy are excuses, Toyota and Honda are thriving in this very same economy.

I can tell by your comments and name that you have been educated in the public school system.

XMR,

Gas prices and the economy are a pretty powerful excuse wouldn't you say? Nearly everything you can buy (food, basic living expense items) is increasing in cost due to logisitcal and other transportation costs.

Even the best management is ineffective when a market is slow.

I also apologize if I offended you. For two cents I'd give you a piece of my mind - and all of yours.

Bee-otch,

Public School Graduate

Yes, if the Diesel prices go up, the cost of transport and along with it all commodities go up.

Naturally GM is increasing the cost.
But why not they make their vehicles lighter and smaller. If they dont, then people who cannot afford will move to other products.