Tuesday, April 19, 2011

GM (GM) Raising Vehicle Prices on Rising Costs

With the price of oil and metal rising, General Motors (NYSE:GM) said it is going to raise the price of its cars and trucks by an average of $123 a vehicle, joining major competitors Ford (NYSE:F) and Toyota (NYSE:TM), which have already done the same.

This shows the rising price of oil in particular is starting to weight on the industry and have a potentially detrimental impact on sales as the companies protect margins and earnings in light of the need to offer discounts to generate sales in the ongoing weak U.S. economy.

GM said the price increases will affect almost all Buick, Chevrolet, Cadillac and GMC models, and will go into effect in the American market on May 2. Only the U.S. market will have prices increased at this time.

According to the Labor Department, the Producer Price Index increased 0.7 percent in March, and has soared 5.8 percent over the last 12 months.

General Motors closed Monday at $29.97, falling $0.27, or 0.89 percent.

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