GM Raises Prices – Except When They Don't
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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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.