U.S. consumers are already battling higher prices at the pumps, but they will soon have to deal with higher prices at dealerships, too. Thanks to slumping SUV and truck sales — automakers’ biggest cash cows — and pending CAFE regulations, the average vehicle cost is set to rise.
General Motors’ marketing and sales head Mark LaNeve says these factors will push new car and crossover prices beyond their current levels. “The challenge for the industry from a revenue standpoint is — revenue has disappeared due to the truck market declines, higher commodity prices, the cost to develop technology to meet CAFE and other regulations,” LaNeve told Automotive News. “So prices are going to have to come up over time, and I believe we’re already seeing it. We’re seeing similar moves from our competition.”
LaNeve failed to mention how much he expects new car prices to rise by and when he expects to see such changes, but did indicate that some of GM’s competitors have already raised their pricing.
For 2008, GM raised the price on its volume Chevrolet Malibu by $300, likely to cover the costs LaNeve discussed.
During the next 18 months, GM will launch 14 new vehicles — 13 of which are cars and crossovers.
