Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

GM and Ford Are Likely to Raise Prices for Many 2003-Model Cars

July 23, 2002

General Motors Corp. and Ford Motor Co., shortly after escalating incentives on current models with zero percent financing, are signaling they intend to raise prices on many of their 2003 models, according to a Wall Street Journal story by Sholnn Freeman.Both Ford and GM offered few details of their 2003 pricing strategies July 22. But the information the companies did release, comments from dealers and analysis by outside pricingspecialists indicate that the two big U.S. automakers are trying to offset the heavy costs of discounting with price increases that for some hot models run as high as 4 percent, though many models will have far smaller price increases.Detroit's Big Three have struggled recently to make price increases stick in the face of intense competition from Japanese, Korean and European automakers. But now, for the first time in several years, GM and Ford have some cover in the form of a weaker dollar and stronger euro and Japanese yen. The currency shifts make foreign-made vehicles more costly.The risk, however, is that a growing number of Japanese and European branded vehicles are made in the U.S. In addition, in the late 1980s and early 1990s, foreign brands were able to recover from currency shocks, cut their costs, and continue to gain market share in the U.S., according to the Journal.
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