DETROIT (Reuters) - General Motors Corp (GM.N) said on Tuesday it will increase prices by as much as $1,500 on its 2008 model-year vehicles in the United States to recover rising steel and commodity costs.
The price increases are effective for vehicles invoiced to dealers, beginning December 19.
“While most cars and trucks in our portfolio will go up between $100 to $500, in hotly contested segments, many vehicles such as the Saturn Aura four-cylinder and the all-new Malibu LS will have no increase,” said Mark LaNeve, GM North America vice president, vehicle sales, service and marketing.
An increase in commodities prices, particularly steel and precious metals such as platinum, has cut into the profits of automakers this year and has hurt overall cost reduction efforts.
Ford Motor Co (F.N) hasn’t announced any price increases related to material costs, said spokesman Jim Cain. He declined to say if Ford plans a similar price increase in the near-term.
GM is boosting prices as it tries to stick to a strategy of lower incentives and clearer pricing, after a decade of big discounting programs eroded profits.
The price increases, averaging about 1.5 percent, will include $1,500 on the Cadillac XLR luxury sports coupe, GM said.
The automaker also said the increase would not affect vehicles already in dealer inventories, which continue to be available to customers until the end of the year during GM’s Red Tag incentives program.
The Red Tag program offers no-interest loans for up to five years on some 2007 models and cash incentives of about $1,000 on some 2008 models.
GM last raised vehicle prices because of material costs in November 2006, GM spokesman John McDonald said.
Reporting by Poornima Gupta; Editing by Andre Grenon/Jeffrey Benkoe