Dear Lutz,

The competition is looking 3.5% better.

Love,
Ray

Ah, buddy. Here come the comments about paying more for an “inferior” product. Every year inflation increases about 3.5%, so it’s foolish for a company not to match that. A lot of you gotta start pulling your heads out.

indeed

That’s all makes a lot of sense: weakening dollar is harming US manufactured cars how? If components and car made in US, USD (strong or weak) should make no difference. 8 years ago dollar was extremely strong, it did not translate in lowering of vehicle prices.

the weak dollar makes anything imported more expensive. That includes Canada, China, and Mexico, where a LOT of components are made. Also makes commodities such as steel, aluminum, oil (where plastic comes from) more expensive.

For GM, who is struggling to sell cars in the first place, raising prices seems counterintuitive, unless they are counting on making discounts seem bigger, which is what I suspect.

Good: The price increase will probably stick. GM’s product has improved to support this increase.
Bad: You’re asking Citibank to help? They are the only other company in the Dow Industrials that has lost anywhere near what GM has lost in the last year.

Actually the strong dollar did lead to lower prices. You just didn’t see a lower price, you saw a price that stayed largely the same. Until this past year, new cars have been getting cheaper and cheaper as a percentage of average income for the past 30 years.
That’s what makes this notable — that we finally have car prices rising with inflation.
As for why it harms US-manufactured cars? Because we don’t live in a hermetically-sealed bubble, that’s why.

Steel and Oil (which makes plastic), two of the largest components that go into a car, are traded on the international markets and both have seen exponential price growth. The price goes in the direction the market says it goes, whether you’re buying from the guy in Pennsylvania or the guy in Turkey. Many of the raw materials that go into your car don’t come the US at all The parts might be made here, the car might be assembled here, but the US isn’t home to every single raw material on the planet. And when the price of all your metals and your rubbers and your oil and every single other thing that goes into a car goes up, but your dollar buys less, it effectively costs you even more.

It’s amazing it only went up 3.5%. They must have some pretty good hedges out there, but those only buy you time. Eventually, if the price doesn’t come down, the price catches up to you.

This isn’t a GM problem. Everyone else might not be making news out of it. And there are certainly more profitable companies that can absorb the increase for a while. But the root problem affects the industry, and our entire economy, in huge ways.

Did Sigma just say the price of my rubbers is going up?

Those were supposedly AMERICAN cars. Why should price of **** in Mexico & China bother it, theoretically?

Xyunya,

Can you not read? Sigma just gave an excellent explanation. Steel and oil are traded on the global market. If the commdities get more expensive, it doesn’t matter where they’re mined, refined, etc. Texas oil goes up. So does Pennsylvania steel. Not to mention the fact that, as you well know, not 100% of American-badged cars get their parts or the natural resources used to make them, from the US. We aren’t home to every natural resource.

So what, exactly, is your closed-minded, ignorant problem?

Because your AMERICAN car isn’t made out of 100% American components made out of 100% American raw materials. You can’t build something as complicated as a modern automobile out of completely, 100% domestically-sourced content.

Even if you have a car that’s assembled in America built out of parts assembled in America, it’s going to be made out of raw material and subcomponents that came from all over the globe. Anything rubber-based is likely to come out of South America, hot-rolled carbon steel likely came from Japan or Russia, the plastic components were probably built as subcomponents in China (from oil shipped from the MidEast) then shipped to an assembler in the US, Aluminum from Indonesia or South America, rarer metals like Chromium aren’t mined here at all and are sourced from Africa or Russia or Nickel from Canada.

And, as I said, even if you DID get all of your components from within the United States, their prices are dictated by the international market. The steel guy down the street isn’t going to sell you his steel for $500/ton when the market price is $1200/ton and someone in Europe is willing to pay it. You pay whatever the International market says the price is (excluding contracts, hedges, so forth).

Sigma, you should probably leave. You show signs of intelligence that are too much for some of us.
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The Americnas that bitch that American cars are **** are still clinging to the memories of the horrible crap from the 70s and early 80s. That was a direct result of President Carter with very strict mandates for the automobile industry that many manufacturers had a hard time achieving with any sort of reliability. How could the big three make great cars all the way until 1976, and then suddenly they are garbage? The emission mandates and 55 mph speed limit imposed by Carter killed the American auto industry. The 1980 Corvette had an 85mph speedometer and only 190hp. All the while he was on TV wearing a sweater telling us to turn down the heat in our homes and wear sweaters so we could conserve. Sound like anyone familiar? Yes, Obama has said the same thing, “We can’t drive our SUVs and eat as much as we want and keep our homes
on 72 degrees at all times … and then just expect that other
countries are going to say OK.” (Campaign speech May 18, 2008)
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I may have gotten off topic, but I, for one, really don’t give a **** what Venezuela, or France, or Switzerland, or India thinks of us.

I’m still trying to figure out how a 72 hour sale can last 7 days?

Good catch Johnny!
Maybe 72 business hours?

No. It’s 72 dog hours.

Ray, yes he did. And the price of rubbers is going up. So you’d better start buying the economy pack, and make sure you use them before they expire.

Johnny, that was really funny. But I think I have your answer. The car dealers close at night, and don’t open until the next morning. I think they are planning this as if the dealer was open 12 hours at a time, which 72 ÷ 12 = 6, so you would get…

6 days? Dammit! I thought I had it figured out. Oh, well, Johnny, I don’t have an answer for you.

nixon started the 55 mph speed limit…..remember it well…a very sad day…

I understand GM is having trouble with rising costs, but this might not be the time to boost prices. Like Xyunya said, where were the price drops when the US dollar was faring better against the Euro and could buy more raw materials?

This is the sort of double standard that pisses me off.

Wow Obama likes his house hot. Mine’s a frigid 67 in the summer.

Damn! Guess it’s going to cost me even more now to get a car next summer! Thanks alot GM….

Why blame GM Need2Getlaid, if you choose to buy their more expensive cars then its your fault.