By on April 18, 2011

You can just about kiss those worries about a US price war goodbye, as GM has become the third major automaker to raise its US market MSRPs in April alone. Like Toyota and Ford before it, GM is raising its prices by about $100 per vehicle ($123 on average) in response not to Japanese parts shortages, but steadily increasing raw material costs. According to the WSJ, the price increase takes effect starting on May 2. And, TrueCar’s Jesse Toprak tells Fox,

The advice would be, based on what we see today, we don’t see any kind of ease in price anytime soon. The prices of everything will go up, moving forward.

Now all GM needs to do is start easing off its incentives so that those MSRPs actually mean something.

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15 Comments on “GM Joins Ford, Toyota In Price-Hiking...”

  • avatar

    In the past, they’ve often raised prices only to then bump incentives by at least as much. Then they’d have a “value” adjustment, lower prices, and start the cycle all over again.

    Over the past year or two everyone has been trying to raise prices. But the increases have been small, suggesting that everyone is afraid that buyers are price sensitive. If buyer’s do stop buying as a result, prices will stop increasing.

    Until then, it helps to realize these increases have occurred. Vehicles produced before the increase will still have the old prices, so you can then save money by finding a pre-increase car.

  • avatar

    Inflation!  Lets just hope that my income keeps up

    • 0 avatar

      see Ben Bernanke and his $600B of created out-of-thin-air money.  Metals are commodities.  Oil is a commodity that turns into gasoline and plastic. All are important items for the automobile industry. The markets have taken notice of this new money and have responded.

      • 0 avatar

        way to go tced in trying to make a political point.
        Commodities are going up because the world economy is growing and consumption of said materials is increasing – supply and demand. Nothing nefarious. Nothing to do with the stock market.

      • 0 avatar

        Well I did’t mention the stock market.  Ben Bernanke runs the Federal Reserve Bank which is not the stock market. It is apparently a *fact* that Mr. Bernanke is buying $600B of US government securities with out-of-thin-air money. The Federal Reserve was set up to operate freely from political influence. You can judge the results.
        Where do you think all that out-of-thin-air money goes?  Into the demand you mentioned. That money does not go into the mattresses of the world.

  • avatar

    Rising car prices is good? We’ll see if the customers pay them; if not, unofficial price cuts – $$ on the hood will bring relief.

  • avatar

    I’d hardly call $100 a price hike, but as you say, MSRP is meaningless, anyway.

  • avatar

    instead they should have lowered prices and been the good guys. how predictable? keep up the $10,000 rebates/discounts. Ewanick should be fired immediately for gross negligence and extreme incompetence.

    • 0 avatar

      Good point – reduce MSRP and incentives – net cost is zero but builds goodwill. Seems straightforward, but if it is so easy why has no-one done it before?
      I remember GM (I was looking a a Saab at the time in 2006) offering “Value pricing” which meant reducing MSRP and incentives. Don`t recall it lasting long!

      • 0 avatar

        …because it doesn’t work. Joe Schmo loves to brag about the “deal” he got regardless of what he actually paid.
        Human nature at work… a “compensator” at a “bargain price” to prove how virile he is….LOL

  • avatar

    And you can kiss this so called futile economic recovery goodbye if oil hits $5.00 per gallon because everything around you will sore up in price with record unemployment, wage freezes and cuts etc. Most people I know have already cut back on travel plans, myself included and are watching every dollar spent living in fear of what lies ahead next year. Way to go speculators!

    • 0 avatar

      it’s not the speculators and it’s not the gas companies. it’s the dollar crashing and it’s going to get a lot worse. blame the federal government and the banksters who control them and the Federal Reserve who gave away trillions of our money with no oversight. americans are so naive and stupid. they deserve what they are getting. and Obama? a liar and a joke.

    • 0 avatar

      You make some good points about gas prices but the recovery is hardly so-called. GDP up for 18 months, stock prices around 10-15% below record highs and unemployment trending down. Seems like a recovery to me.
      I wouldn`t call Obama a liar or a joker. Also how about some personal responsibility – Americans vote (well half of them do), Americans on average have spent more than they earn for decades. The Federal Govt is not the fount of all evil.

  • avatar

    LCD television prices have been falling steadily for the last 5 years but it’s not really what I would call a “price war”–more like “competitive market with maturing technology.”

    I’d suggest that a “price war” is when companies sacrifice profits in order to gain market share or put competitors out of business.  By that definition, if price increases are less than input cost increases, this could still be considered a price war scenario.

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