GM has announced its intention to raise prices on its '08 model year cars and light trucks by about 1.5 percent, to cover "steel and commodity costs." But not on vehicles facing stiff competition. Reuters lets GM Marketing Maven Mark LaNever ring in the changes. "While most cars and trucks in our portfolio will go up between $100 to $500, in hotly contested segments, many vehicles such as the Saturn Aura four-cylinder and the all-new Malibu LS will have no increase." So… which vehicles can "afford" this increase? Why the Cadillac XLR! Yup, Caddy's priciest model, a $97kish vehicle that's sold just 1622 examples year-to-date (down from last year's 2917), gets an extra $1500 on its sticker (ready for discount?). GM PR declined to name any other specific vehicles facing the price hike, lest we call attention to their relative sales. In any case, you've got to wonder about the timing of the announcement– smack dab in the middle of GM's Christmas Toe Tag sale. Are they trying to say "get 'em while they're cheap?" As Reuters points out, the whole price hike deal is a bit odd. "GM is boosting prices as it tries to stick to a strategy of lower incentives and clearer pricing, after a decade of big discounting programs eroded profits."
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GM raising their prices is of little or no consequence, for the following reasons:
1. The prices are rising by not much for customers to switch brands.
2. Most of the prices will be discounted to buggery, so the price rise will be gone.
3. Most people are brand loyal and are willing to pay extra if they get a better product/better service/better resale etc. One only has to look at the success of Toyota and Honda for evidence.
Also, I was looking at the Cadillac range the other day and I wondered if the people who designed them only had access to a ruler? What’s with the right angles? And that XLR’s rear, it looks like someone took a meat cleaver to it and chopped the back off!
http://my.is/forums/f41/lexus-announces-price-increase-2008-models-348741/
Saw that on my.is on Monday. No coverage on the Lexus price hike?
Virtual Insanity :
Saw that on my.is on Monday. No coverage on the Lexus price hike?
1. We missed it (please send all news tips and questions about TTAC’s editorial policies to robert.farago@thetruthaboutcars.com)
2. While the Lexus price hikes also come at a weird time, they are smaller, across-the-board increases.
The story here is the uneven application of GM’s price hikes, and the fact that GM has become a heavily discount-dependent automaker. (Lexus also offers discounts, but they are not prone to fire sales.)
ArcelorMittal Warns Steel Prices Will Increase Next Year
Prices in U.S. for strip mill products will increase by $40 a ton.
By . Agence France-Presse
Nov. 20, 2007 — As a result of raw material and energy cost increases, Arcelor-Mittal said Nov. 19 it would increase prices for flat steel products in North America and Europe next year.Arcelor-Mittal announces price increases for flat steel products in NAFTA (grouping the U.S., Canada and Mexico) and European markets as a direct consequence of raw material and energy cost increases in 2008,” it said. In the U.S., the steel group said it would raise prices by $40 a ton for strip mill products as of January 1.
That comes on top of an average $20 per ton already introduced in the fourth quarter of this year.
“But not on vehicles facing stiff competition.”
Which GM vehicle is not facing stiff competition, excepting perhaps the 3/4-ton Suburban?
Your asking me, a forum goon, to send you news tips? I hope you have a big mailbox, lol.
Based on what I have been told, the only three cars not effected by the price hike are th LS Base Malibu, the 2008 Pontiac G8 and Vibe, and the hybrid cars. All others are geting the kick.
as a result of raw material and energy cost increases, Arcelor-Mittal said Nov. 19 it would increase prices for flat steel products in North America and Europe
Man, that corn ethanol is driving the price of EVERYTHING up!!
Funny. The ’07 XLR (examples of which I’m sure are quite numerous on dealer lots) has a full $7500 rebate currently. Wow. And that’s from GM itself – no telling what dealers will do (prostitution? full-on bribery?) to get you to take one of these lot queens.
I believe the ’08 already had over $1000 off from GM before this announcement (my numbers were collected several weeks ago).
This is crazy.
Why not increase the price of vehicles that use more metal,like the H2 or the Suburban?
Steel’s up $40/ton so they raise car prices as much as $1500? Man, that’s some cost-to-price ratio! There can’t be much more than a ton of steel in an average car. Well, OK, the article also refers to “commodities,” so apparently the cost of glass, aluminum, rubber, plastic, copper, etc., is also higher.
But there’s no need to worry. The new contract with the UAW supposedly will save GM mucho money. Surely, significant reductions in sticker prices will promptly follow.
Y’know, I read somewhere that we Americans throw away enough steel cans (from vegetables, soups, etc) in a year to cover ALL the steel used in the automotive manufacturing in this country…
…so why doesn’t GM just start a Steel Can Recycling Program, take the tax write off, and brag about being the “greenest automaker out there.” And use copious images of the destroyed environment surrounding that Prius component manufacturer.
Seems pointless when GM can’t get anything near list price for its cars now.