GM Raising Prices on Some 2008 U.S. Vehicles

DETROIT, Dec 18, 2007: Reuters reported that General Motors Corp said 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 on and after Dec. 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, have cut into the profits of automakers this year and has hurt overall cost reduction efforts.

GM is boosting prices as it tries to stick to a strategy of lower incentives and clearer pricing, after decades of big discounting programs that eroded profits.

The price increases, averaging about 1.5 percent, will range from nothing on the 2008 Chevrolet Malibu sedan to $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 the GM Red Tag incentives program.

GM's 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 prices of its vehicles in Nov. 2006, GM spokesman John McDonald said.

Reporting for Reuters by Poornima Gupta; Editing by Tim Dobbyn/Andre Grenon