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General Motors To Raise Prices $123 Per Vehicle

April 19, 2011
2 min to read


General Motors Co. the largest U.S. automaker, will raise prices by an average of $123, or 0.4 percent, per vehicle because of higher commodity costs.


The price increases will be on most models in the U.S. and will be effective May 2, Tom Henderson, a spokesman for Detroit- based GM, said today in a telephone interview. The move isn’t related to the Japan earthquake, he said.

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GM is following Toyota Motor Corp. and Ford Motor Co. in boosting prices, reported Bloomberg. Ford said April 4 it would raise prices by $117, or 0.4 percent. Toyota’s increase on most models averaged 1.7 percent, the automaker said March 31.


Industry price increases are common as automakers enter seasonally stronger months for sales in the spring and summer, said Maryann Keller, principal of a self-titled consulting firm. They will be supported this year by parts shortages resulting from the March 11 Japan earthquake and tsunami, she said.


“Auto companies even before the tsunami have not been able to meet their production targets,” Keller, whose firm is based in Stamford, Connecticut, said in a telephone interview. “They’ll get away with a price increase because there just isn’t a huge supply of vehicles out there to result in a great amount of discounting.”


GM will notify dealers of the increases today, Henderson said. The automaker ended March with U.S. inventory of 574,000 vehicles, about 57,000 more than at the end of February, according to an April 1 statement.


GM, Toyota and Ford, based in Dearborn, Michigan, each have lost some North American output, citing supply disruptions since the earthquake in Japan. Production disruptions may lead to a tighter supply of vehicles and higher prices, Itay Michaeli, an analyst for Citigroup Global Markets in New York, wrote today in a research note.

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Low industry inventory and Japan-related supply-chain issues should keep pricing in check for at least three to six months, he wrote.


GM declined 27 cents to $29.97 at 4:15 p.m. in New York Stock Exchange composite trading. The shares earlier fell to $29.90, the lowest since GM sold shares at $33 each in an initial public offering in November.


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