Posted on Thursday 1 May 2008
As carmakers face stricter fuel-economy and emissions regulations, shifting demand to smaller and less profitable models and shrinking sales in key markets like Japan and the U.S., GM marketing chief Mark LaNeve says prices for new cars and crossovers will have to rise. This follows previous statements from GM vice chairman Bob Lutz that new CAFE regulations will push car prices up on average by $6,000.
LaNeve wasn’t willing to predict when and by how much car prices will rise but said a number of rival carmakers had already boosted prices and GM would have to be competitive in its pricing. The increase doesn’t necessarily mean a higher sticker price. Instead, they could be factored in by lowering incentives or increasing transaction prices, LaNeve explained to Automotive News.
GM, along with a number of other carmakers, have seen revenues drop because of poor economic conditions, a decline in truck sales, higher commodity prices and the cost to develop technology to meet CAFE and other regulations. In April alone GM truck sales fell 26.5%. Unsurprisingly, 13 out of 14 launches GM is planning in the next 18 months will be either cars or car-based crossovers.
They are not selling well now, do you think we will buy them when they get more expensive?
Plenty of good used ones out there .
the reason they are so expensive is because crap car makers are pushing cars that no one will buy hence the ones that people are willing to invest in get more expensive so as to cover the overheads ……i mean half the line ups of the American car makers should be trashed straight up…
Renton makes a good point…..Car sales are declining hugely with the economy…..and now prices are going to have to go up. Eventually this whole CAFE thing will either completely killl the auto industry in North America, or, more likely, will be squashed.
Soupie…true. The new CAFE has a sliding scale that benefits the already oversized American cars and hurts companies of already small cars. eg Honda. Porsche as well.
The new CAFE is based on “footprint”. Big cars do not have to improve as much as they should. Surely a worthless piece of legislation that sounds like a good thing, but in reality is a bunch of crap.
renton; people need to go places, so yes, people will keep buying cars. it will get more expensive but people will keep driving. they just wont drive as large of vehicles any more. sure there are good used cars out there, but a new car is plenty better than a used one. I’d rather drive a new Kia than most used cars.
Wizards; everyone’s got their tastes. if you’re seeing a car on the road and not in the dealership, then that answers your question. clearly some one wanted that car enough to spend 20 grand or more on it.
Soupie; if anything I think this is the best time for the mileage to go up. People are broke so they’ll buy smaller cars. the people who arent broke will still want larger cars but now with the way the economy is, the production will slow down, making it easier to focus on quality. just take a look at ford; they’ve lost market share over the last 10 years but they’ve finally returned to profitability for the first time in 10 years.
renton: the sliding scale was a proposal which makes so little sense even the congress won’t be stupid enough to vote for it.
In the end, the public knows that the only way to get good mileage is to go small. this is also cheaper (generally) as well, so people save money at the dealer and at the pump. the economy sucks and fleet averages will start to climb because of it. and as things return to the way they should be (truly rich people buying large cars and SUVs, and the rest of us Peons making it through on our compact hatch backs), large sedans can sell for a little higher, while promising quality, design, nice interior, and lots of engine tech to squeeze everything that can be taken out of gasoline.
That a really good way to sink the entire US auto market. The prices are already too high. They have been for too long. The auto industry has a strangle hold on congress and they don’t like being told what to do, so like spoiled children they are having a temper tantrum by saying they are going to pass on the CAFE prices to customers. They raked in high profits during the SUV era and now they are freaking out. Boo Woo! I don’t feel bad for them at all.
Lord knows that the technology for better gas mileage and better engines is out there and has been for a while. They just don’t want to convert. Because that means less people buying new cars every few years. The car companies are in league with the oil companies and it’s obvious. The Hybrid thing is just a smokescreen.