CANADIAN DOLLAR SLIDE SPARKS GM PRICE HIKE

TORONTO - In a move likely to be followed by competitors, General Motors of Canada has raised prices an average of 3.7 percent.

The Dec. 5 hike comes on top of model year introduction prices that rose an average of 1.9 percent (for comparably equipped vehicles on a sales-weighted basis).

Most of the sticker price increases by GM are in the 4 to 5 percent range.

For example, Cadillac prices are up about 3 percent; however, there was no increase on the Buick Skylark or any Saturn or Saab models.

The steepest hikes are on redesigned models or vehicles in strong demand.

The Chevrolet Suburban, for example, which is in short supply, is up by 7.7 to 8.8 percent. Other above-average rises include 7.1 percent on the Chevrolet Lumina sedan and 5.6 percent for the base Chevrolet Cavalier coupe.

Currently, most Canadian vehicle prices are extremely low in comparison to U.S. products because manufacturers have not fully passed on the effect of the declining Canadian dollar.

With the exchange rate now around 73 cents U.S., for example, the base Cavalier, which lists for $10,060 in the United States, should cost about $13,800 Canadian.

Before last week's increase, the 1995 Cavalier listed for $11,595 in Canada ($8,464 U.S.); it now lists for $12,245 ($8,939 U.S.).

Even so, vehicle prices here are rising faster than overall inflation. Annual inflation in Canada was under 2 percent in 1992 and 1993 and stood at minus 0.2 percent through October 1994.

Last week, Ford of Canada spokesman Tony Fredo said that the automaker's prices are under review and an increase was a 'strong possibility.'

Chrysler spokesman Walt McCall said, 'We're aware of the changes GM has made, and we're looking at our own.'

You can reach Jeremy Sinek at jeremy.sinek@sympatico.ca

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