Ford Increases US Prices by an Average of $124

The Blue Oval must be really confident in its products and market positioning right now, because it has reportedly increased prices across the board by 0.4%. The move has been justified by company officials as being necessary due to the increased costs of acquiring commodities needed to build vehicles.

Ford Motor Co. has upped prices by an average of $124 per car this month, according to Todd Nissen, a company spokesman. Automotive News also reports that this is only the latest in a list of increases, which saw US consumers having to pay more in April and January.

Ford has raised prices by an average of 1.3 percent, or $375 per vehicle, this year, Nissen said, adding the average price increase for all automakers in the U.S. is about 1 percent.

GM last month bumped up its prices an average of 0.4 percent, or $123. Toyota also hiked prices on 2011 car and light truck models. Rising prices for steel, rubber and other materials are battering automakers, who have been better able to pass along the higher costs because of smaller new car and light inventories, analysts say.

Volkswagen also bumped up the base price of the Jetta by $500 this month, due to the cost of raw materials, but high demand is also to blame. This is sort of a Catch-22 situation, where economic recovery first helps automakers by generating increased sales, then takes it all away with high gas prices and increased costs with raw materials.

Following a major decrease in income during the last months of 2010, Ford managed in the first quarter of 2011 to boost their sales, reaching a net income of $2.6 billion.