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GM raises its prices to help offset costs

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GM raises its prices to help offset costs

Automaker increases stickers on about a third of its vehicles to cope with costlier raw materials.

Sharon Terlep / The Detroit News

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Link to Original Article @ DetNews

General Motors Corp. raised prices an average of 0.5 percent on about one-third of its vehicles this week to help cope with the soaring cost of raw materials, a company official said Wednesday.

Prices rose from $60 to $425 a vehicle on 35 percent of GMs cars and trucks, GM spokesman John McDonald said. Most increases were from $90 to $140, he said.

The company won't increase prices on the redesigned 2007 Chevrolet Silverado and GMC Sierra pickup truck, which started arriving at dealers this week. It also will not raise prices on other 2007 models such as the Pontiac G5, the Hummer H3 and the Saturn Vue Green Line, GM's first hybrid vehicle, he said.

GM hiked the price of its best-selling U.S. car, the Chevrolet Impala, by $115.

"These are extremely small in terms of the percentage," McDonald said. "But when you look at how much we sell, even this helps the bottom line."

Automakers and their suppliers have been hit with double-digit increases in the cost of several crucial raw materials, from steel to the resin used to make plastic.

Steel prices globally have gone up 13 percent since January.

"High steel prices are adversely impacting the entire U.S. economy," Ford Motor Co. spokesman Paul Wood said. Ford officials said they don't plan price increases directly tied to materials costs.

DaimlerChrysler AG's Chrysler Group will increase the sticker prices for some of its 2007 models, but that will be offset by lower pricing for many extra features, Chrysler spokeswoman Christina Biache said. The company isn't attributing the increases to raw materials costs.

Prices have been rising for several years and, which companies have largely avoided passing those costs on to consumers, they won't be able to avoid doing so for long, said Michael Robinet, an analyst at consulting firm CSM Worldwide Inc. in Farmington Hills.

"They have been able to withstand it so far," Robinet said.

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