With vehicle sales slumping fairly evenly across the board albeit with a few exceptions, raising new car prices may not sound like a good strategy during these difficult times, but VW is considering just such a move. A company representative said on Wednesday it cannot compensate for rising raw material prices entirely in-house, and needs to look at other options.
The news came from Volkswagen ’s executive VP of VW group sales and marketing, Detlef Wittig, who said in a conference call to journalists that other automakers are scared of passing their higher costs onto the car-buying public, says an Automotive News report.
“The industry does not seem to be able to compensate all the price hikes except through rationalization programs only,” he said.
Wittig does recognize the touchy nature of such a decision, however, as he also said “We are acting in a very competitive market, so we have to watch our competition as well.”
While it is not known which models will be affected if VW does decide to go ahead with the plan, or how much prices will rise, the changes could come into effect in the second half of 2008.
In order to make its cars more profitable in North America, VW recently announced it will open its first U.S. plant in Tennessee by 2011.
