Autoblog

Volkswagen is making money hand over fist right now thanks to cost cutting measures and increased global sales, and the German automaker wants to keep the good times rolling. High commodity prices for items like steel, aluminum and rubber are beginning to eat away at VW's cash horde, so the German automaker may hike the prices of its vehicles. VW marketing chief Detlef Wittig told reporters that he feels automakers are afraid to raise prices in such a competitive sales environment, and that the company was monitoring the situation closely. While VW may not be afraid to pull the trigger on price hikes, it likely still won't ask customers to pony up the entire amount for high commodities. A lot will depend on whether VW's many competitors also jack up MSRPs, and by how much.

It seems as though most automakers here in the States have either announced price hikes or are "thinking about doing it." The market is even more competitive in Europe, so such a decision isn't as easy. Wittig expects several automakers to raise prices in the second half of the year.

[Source: Automotive News (subs req'd)]

While high gas prices have had less of an effect on Japanese automakers than their American counterparts, the soaring price of commodities like steel have stung just as badly. Toyota is considering raising the prices of its vehicles in response to those higher commodity prices, at least in its home market. The Toyota elite will make a decision after pouring over April-June sales data and 2nd quarter production costs. The news comes only days after Nissan CEO Carlos Ghosn suggested that Nissan would raise its prices in Japan if a market leader decided to do the same. Toyota executives did not mention raising the price of its own cars and trucks here in the States, but add rising inflation and a weak dollar to high steel prices and the move seems very likely.

[Source: Reuters, Photo by YOSHIKAZU TSUNO/AFP/Getty ]

Ford Motor company has bumped the prices of its domestic vehicles by an average of $198 fleet-wide, bringing the overall model year increase to $502 per car, truck, van, and utility vehicle. The only vehicles not effected by the latest increase are the Lincoln Town Car, the E-Series vans, and the soon to be defunct Lincoln Mark LT. While half a grand sounds like a lot of money, it only represents a 1.8-percent increase over last year's overall costs, which is a full percentage point less than the average inflation in the past year. While nobody likes to see prices go up, it's hard to fault Ford for attempting to keep up with the financial times. The big question is whether customers will be willing to pay for the hike in a soft car market, or if Ford will need to put more cash on the hood to move metal.

[Source: Automotive News - Sub. Req.]