Big 2.5 increase sticker prices to combat slow sales
When sales slow, the old business adage dictates that you either cut expenses or raise rates. For the two big boys left in Detroit and the soon-to-be, if not already, sold off Chrysler corp, the latter seems to be the only viable option.A recent sales droop is causing all three automakers to increase the sticker price on the majority of its models. Granted, the biggest bump is about a half of a percent, but it's still an increase, regardless.
For the General, that inflation amounts to $91, while Chrysler raised its sticker $94. The big bump came from the Blue Oval boys, whose increase amounted to about $146. Granted, all those figures are on a sales-weighted basis.
Automotive News has a full breakdown of each one of the Big 2.5's brands, but Chrysler at $254, Cadillac at $163 and Dodge at $146 showed the biggest increases. Jeep, on the other hand, only saw a jump of $6, while Saturn prices didn't budge an inch.
[Source: Automotive News – Sub. Req.]
Reader Comments (Page 1 of 1)
geo.stewart 9:35AM (5/14/2007)
just add another $500 to the rebates that will be out in August...
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Matt 9:47AM (5/14/2007)
Uh... WHAT business adage is it that says you RAISE prices on a slow-moving product??? Oh RIGHT, the American auto industry adage... right. That would explain a lot.
Widgets anyone?
MCS
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John Paul Rowan 10:02AM (5/14/2007)
They need to work on quality first and then raise prices. There is no way that you can justify a price increase when you are still lagging behind lower priced rivals in quality.
http://www.refinedrogue.com
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ruggels 10:03AM (5/14/2007)
I'm guessing saturn didn't budge because they've a) got no problems selling their recently americanized european models b) have the least amount of pointless cross competing models c) see a and b.
Good for saturn, pretty much the only domestic arm who has models I'd seriously consider where I in the market for a car.
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Infinihertz 10:18AM (5/14/2007)
#4, who is the "they" that needs to work on quality? Both Ford and GM have improved substantially in the last few years, in most cases matching Toyota (though Honda still remains #1 in TGWs).
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Tim 10:20AM (5/14/2007)
4> John Paul, WHERE have you been??? USA auto industry HAS been making quality products for a while now. Pull your head out of your... Have you even LOOKED at a vehicle from the US automakers lately. Oh sorry, dumb question - no you haven't. Also, whats $90??? So what - who would notice anyhow when you are looking at sticker prices anyhow? Get a life and stop bashing the Great American Automotive Industry. You must work of the UAW.
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Gardiner Westbound 10:42AM (5/14/2007)
Increasing the value of unsold vehicles is accounting legerdemain that artificially increases GM's book value. Wall Street hucksters will be pleased. The rubes will take a bath when the rebates needed to sell them are factored in.
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Big Mike Wood 10:44AM (5/14/2007)
The quality coming out of the Big Two is as good if not better than anything coming from Nissan or Toyota but I don't see how you can raise 'real' prices. Is this just so they can pile on big rabates in the fall and not affect the bottom line as much? Kinda like the old 'raise prices by 50% then offer a 33% off sale' scheme so many other retailers do?
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Tim 10:50AM (5/14/2007)
#9, your math does not add up. If prices were raised by less than $100, and rebates are to be substantially MORE than $100, your "raise by 50% then offer a 33% off.." is incorrect. Go back to grade school for some refresher math. You ARE NOT smarter than a 5th grader. I do agree with you though regarding quality - Current GM/Ford quality is far better then what the Asians are pushing out the door.
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Big Mike Wood 11:28AM (5/14/2007)
Thanks Tim, but it's your reading comprehension that is actually at fault. There's no math problem there, just an analogy (uh-nal-uh-jee). See http://dictionary.reference.com/browse/analogy for more information.
Don't get discouraged - with a little bit of work you'll get there.
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Tim 11:49AM (5/14/2007)
Yes - I got the Wal-Mart uh-nal-ah-jee. Nothing wrong with my reading or spelling. I just get frustrated that so many people out there will not give Detroit automakers a second chance after a lousy 80's and early 90's. However they can forgive the Asians. I just don't get it, Hyundai can be forgiven but GM/Ford cannot? Most of these people have never even looked at US vehicles before passing judgement. They read the one-sided media reports. It boils down to the fact that the quality is so much better that all anyone can find at fault with US automakers nowadays is raising prices by mere pocket change. Honestly, would anyone have ever noticed? Unless that is, if they car shop every day. (hope my spelling is okay - I didn't proofread!) :-)
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Billy the KIDD 12:30PM (5/14/2007)
Anyone ever studied MARKETING? I did...and GM has purposly made saturn look appealing..how many other cars are they putting a CADILLAC engine in?
They Killed off OLDS to make Saturn Profitable,,but what about the DEALERS that paid $$ for a OLDS FRANCHISE?? See they are even screwing their DEALERS!
WOw so now they make a well built car...dosent make up for junk like the MALIBU, cavalier, sunfire, and HHR all made in MEXICO..! hey ist that a foreign country???
Read the reports people..Ford still is churning out overpriced product (EDGE), with cheap interior, poor build quality..and a hefty price tag? Is this how they save themselves? Ford has shot itself in the foot so many times...you would think they run out of ammo soon! Not really worried about repete customers AGAIN! where are the guys that bought contours..ohhh they DRIVE TOYOTAS NOW!! R.I.P BIG THREE! This guy is going to drive one of his 2 Hondas...QUALITY Build, excellent resale, and DEPENDABLE!
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tcc3 1:01PM (5/14/2007)
Sonme people are still holding a "Hyundai makes cheap crap" grudge.
The real problem is the big 3 have done this before. They hit some hard times, they improve quality. Maybe a few cool halo cars to get folks excited again. Then in 5 years they let the new models languish with no improvements, they start cutting corners, and the cycle begins anew.
They are doing better, but thats not good enough to people who got burned by the flip flopping in the 80's and 90's. The big three are going to have to improve and *keep it up* to win back the hearts and minds of the jilted consumer.
Hyundai put its money where its mouth was with one of the best warrantys in recent memory. Wheres the American mea culpa?
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Kevin 12:52PM (5/14/2007)
its not just the issue of Japanese Quality, its their looks. They have earned the pockets of the young and won't let them go. I don't know many people in their 20's who want to buy a chevy malibu, or a dodge caliber. They are buying Scion TC's, Accord Coupes, and so on. They look more refined. Then they got them when they want an acura TSX, Lexus IS etc.
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Stéphane Dumas 9:13PM (5/14/2007)
"this guy is going to drive one of his 2 Hondas...QUALITY Build, excellent resale, and DEPENDABLE!"
With no more big 3, where Avis, Entreprise, National and Hertz will buy their fleet cars for rental? I think there lots of Honda who could go in a not-so-distant future to Avis and all the fleet rentals...so the resale might take a hit.
And if Nissan can do some layoffs of its Synmra plant in TN, one day, soon or later, Toyota and Honda will face the same music. It happened with Sony at various locations around the world since the late 1990s http://news.bbc.co.uk/1/hi/wales/south_east/4634331.stm
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