Facebook Twitter

PRICE OF ’94 GM CARS WILL INCREASE 1.8%

SHARE PRICE OF ’94 GM CARS WILL INCREASE 1.8%

General Motors Corp. said this week its 1994 models will cost an average of 1.8 percent more than this year's, partly because it will offer more models with set prices.

The leading automaker's modest price increase, about the half the rate of inflation, also reflected Detroit's determination to exploit the rising value of the yen currency against the dollar. That is likely to further raise the prices of Japanese imports and could encourage more consumers to buy American.GM's so-called "value pricing" strategy began in GM's Saturn subsidiary, which sells models at preset prices with no haggling. Customers pay more for a few extras, but the most popular options, such as air conditioning, are standard.

GM expanded the factory-set price on several other models this year, especially at its struggling Oldsmobile Division. Buick and Chevrolet also offered non-negotiable prices on several models.

For the customer, one-price vehicles that include popular options take the showroom guesswork out of buying a car. People who like to haggle still can on other models.

Automakers, most of which offer at least one value-priced model, save on manufacturing costs by reducing the number of combinations of the same model. Building the same model saves on tooling costs, reduces the time it takes to build the vehicle and increases quality.

The increase on cars will be 1.5 percent, or $290, and 2.2 percent, or $445, on light trucks such as pickups, minivans and sport utility vehicles. Ford Motor Co. and Chrysler Corp. said their 1994 pricing announcements would be made later.

J. Michael Losh, GM vice president of North American Operations sales, service and marketing, said Tuesday GM is committed to the pricing strategy throughout its lineup.

"This is not a short-term trend. It's not just older cars," he said. "We have it on the Camaro and Firebird, and they're brand new."

GM's greatest success so far has been on aging cars due to be replaced with new models in the next couple of years.

The biggest winner has been the Chevrolet Cavalier, a subcompact that GM lists for less than $9,000. Cavalier was the third-best selling car in the country in the first six months of the year.

GM will keep the price of the 1994 Cavalier under $9,000, too. The two-door coupe will be $8,845, up from $8,520 this year. The four-door sedan will be $8,995, up from $8,620. Both prices are lower than in 1991 and include more standard equipment.

At Oldsmobile, 16 models will be offered with set prices for 1994, a further move to "Saturnize" GM's oldest division. Olds' 1992 sales of about 400,000 cars were less than half the 1986 peak of 1 million. The division has eight specially priced models this year as 95th anniversary editions.

The Saturn small-car subsidiary is GM's newest car operation. Its marketing and customer coddling strategies have been widely copied by other automakers.