GM raising prices 1.5% on average

The cost of materials that go into making your car are getting more expensive, specifically steel and other commodities, and General Motors has decided to pass that extra cost onto the consumer by raising the price of its 2008 model line an average of 1.5%. Hey, at least they're being up front about it. The increase also won't affect every car. The 2008 Chevy Malibu and Saturn Aura, for instance, won't go up at all. Most other vehicles, however, will see a price increase of between $100 to $500, while the MSRP of the Cadillac XLR gets slapped with an extra $1,500. GM tells us that the increase doesn't apply to vehicles already in dealer stock, only to vehicles invoiced to dealers on or after today, December 19th. Even with the price increases, GM still claims its 2008 line of vehicles "remain the best value in the market place" thanks to its "best warranty coverage of any full-line manufacturer" and "award-winning designs". That's a bold claim to make with brand's like Hyundai and Kia in the marketplace, as well as other import automakers that don't have to also roll up huge legacy costs into the price of their vehicles.

[Source: GM, Photo by Justin Sullivan/Getty]

PRESS RELEASE:

GM Announces Price Increases To Partially Recover Rising Commodity Costs

Increases Range From $0-1,500 On Select Models, Averaging About 1.5 Percent

DETROIT – GM today announced a price adjustment on most of its 2008 model year vehicles to partially recover increasing steel and commodity costs. The price increases, averaging about 1.5 percent, are effective with vehicles invoiced to dealers on and after December 19, 2007.

"This targeted price increase is designed to partially recover ever-increasing commodity costs. While most cars and trucks in our portfolio will go up between 100 to 500 dollars, in hotly contested segments, many vehicles such as the Saturn Aura four-cylinder and the all-new Malibu LS will have no increase," said Mark LaNeve, GM North America vice president, Vehicle Sales, Service and Marketing. "With our award-winning designs and the best warranty coverage of any full-line manufacturer, our 2008 vehicles remain the best value in the market place."

Price increases will range from $0 on the 2008 Chevrolet Malibu LS to $1,500 on the Cadillac XLR luxury sports coupe. Importantly, this price increase will not affect vehicles already in dealer inventory, which continue to be available to customers until the end of the year during the GM Red Tag Event.