Newspaper article THE JOURNAL RECORD

Big 3 Take Stealth Tactics to Midyear Auto Pricing

Newspaper article THE JOURNAL RECORD

Big 3 Take Stealth Tactics to Midyear Auto Pricing

Article excerpt

DETROIT -- With many consumers put off by the high cost of new cars and trucks, some automakers are becoming more secretive about their midyear price increases.

When Ford Motor Co. raised prices for its popular Explorer sport utility vehicle and redesigned F-150 pickup by between $200 and $425 earlier this month, it did so without a public announcement. Only dealers were told.

Industry analysts say that was the latest example of an apparent trend among automakers toward stealth pricing at midyear.

"For the last two years, they've been fighting an uphill battle on the issue of affordability," said analyst Maryann Keller of Furman Selz in New York. "They believe that widespread publicity about price increases discourages people from coming into the showroom."

Pricing decisions affect inflation and the course of the economy. Lately, they have become a sensitive subject in Detroit as some automakers post record quarterly profits.

"The public perception is it's just greedy," said Art Spinella of CNW Marketing Research in Bandon, Ore. "That's debatable, but that's the perception."

Ford spokesman Jon Ochs said the No. 2 automaker announces midyear price increases only when "a significant number" of models are affected, rather than just one or two.

But the F-150 is the biggest-selling vehicle in the United States; the Explorer ranks third. Together, those two models accounted for about a quarter of Ford's sales volume in the first six months of this year.

No. 1 General Motors Corp. raised prices of its top-selling Chevrolet Cavalier and its structural twin, the Pontiac Sunfire, by $200 to $215 in April without public announcement.

GM generally announces only across-the-board increases or those that affect a "significant volume" of cars and trucks, spokesman Dean Rotondo said.

"If 25 percent of our volume was being raised, we would announce it," he said. "We feel the public deserves that."

In light of the recent silence at Ford and GM, No. 3 Chrysler Corp. might change its longtime practice, says spokesman Jim Crawford.

"Our policy has been to announce every price increase, be it new model year or midyear," Crawford said. …

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