DETROIT - The Big 3 are singing an old Irving Berlin tune as they try to keep pace with the ever-rising costs of marketing their new vehicles. The song in this instance goes, "I can raise prices faster than you." And the replies bounce back, "No, you can't." "Yes, I can." "No, you can't." "Yes, I can."
The Big 3 have raised prices 17 times in the 2003 model year, which has just about reached the halfway point. Ford Motor Co. and the Chrysler group have boosted stickers six times each; General Motors is just a step behind with five increases.
Recent weeks have brought new hikes for both Ford and GM. For GM, it was the second price jump in 27 days.
The Big 3 raise prices in a losing effort to recover some of the huge incentives ($2,000 to $3,000 per vehicle) that GM's marketing strategy forces them to pay.
Somehow, the import-badged cars and trucks manage to stay out of the GM net. GM's latest price hike averaged $187 per vehicle on a sales-weighted basis, an Automotive News analysis shows. It followed a bump of $99 at the beginning of February. The combined boost of $286 is about 1.2 percent of the average price of a 2003 model.
That is an answer to those who maintain that new-vehicle prices are not rising. Prices are going up, all right, but the domestic makers are giving back those increases (and more) in the form of rebates and cut-rate loans.
Average increases for GM brands in the latest action amounted to $288 for Cadillac, $253 for GMC, $218 for Buick, $200 for Chevrolet, $134 for Oldsmobile, $90 for Pontiac, $41 for Saturn and nothing for Hummer. The figures are sales-weighted for each make and for the corporation as a whole.
Ford Motor's March price boost averaged a sales-weighted $122, according to Automotive News. By brands, it was $128 for Ford cars and trucks, $84 for Lincoln and $80 for Mercury.
Ford Division accounts for 88 percent of Ford-Lincoln-Mercury sales, thus the average hike for the corporation is close to the figure for the Ford brand.