Chrysler plans to lift prices by 2%

By Jeff Green  |   2008-6-16  |     NEWSPAPER EDITION

CHRYSLER LLC, the third-largest US-based car maker, said it will boost prices an average of 2 percent on all 2008 model-year cars and trucks because of rising costs for steel and other commodities.

The increase will take effect on vehicles shipped to dealers starting today, Chrysler spokesman Stuart Schorr said. Chrysler's US sales fell 19 percent in the first five months of this year, Bloomberg News reported.

"Today's economic conditions and future forecasts indicate unrelenting pressure as it relates to commodity prices, specifically steel, which have forced our hand," Schorr said.

Chrysler said the increase will bring its models in line with competitors' actions. General Motors Corp raised prices as much as US$1,500 in December because of higher commodity expenses, and Ford Motor Co Chief Executive Alan Mulally said on May 22 that the burden was among the reasons that his company was forced to abandon a 2009 profit goal.

Chrysler reported a US$1.6-billion operating loss for 2007 and a US$650-million net loss for 2006, when the Auburn Hills, Michigan-based auto maker was part of the former DaimlerChrysler AG.