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This is Why This American Automaker Won’t Make Its Cars a Dollar Cheaper

The price cuts announced by Tesla not a long time ago were seen by many as a trend-setting initiative that would rapidly be adopted by other carmakers out there.
GM isn't planning any price cuts for its cars 38 photos
Photo: Bogdan Popa/autoevolution
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Given prices of pretty much everything skyrocketed in the last few months, making cars cheaper would certainly be a big surprise, especially because the demand continues to be at a record level these days.

This is the reason General Motors isn’t planning to make its vehicles a single dollar cheaper.

CEO Mary Barra said in a conference call with analysts after revealing the company’s latest financial statistics that General Motors isn’t planning any price cuts for the time being.

Asked if GM plans to follow in the footsteps of Tesla, Barra says she doesn’t see this happening in the short term, explaining that all models are already priced just right. Furthermore, Barra claims General Motors is recording “a very strong customer interest in our products,” and as a result, “we’re priced where we need to be.”

The good news is that Barra doesn’t rule out potential price cuts that would be announced at some point in the future. Remaining competitive is obviously a long-term priority, and if the rest of the industry cuts prices, embracing the same strategy would become the only option for General Motors as well.

In the United States, customers who order a new Traverse need to pay at least $34,520, while the base version of the Tahoe can be had for $54,200. The Suburban is priced at $56,900 for the model year 2023, but the High Country version with a 6.2-liter V8 engine and a 10-speed automatic transmission starts at $81.995.

General Motors is currently seeing strong demand for several MY 2023 vehicles, including the new 2023 Cadillac Lyriq. The all-electric model starts from $62,990 in the United States.

One of the reasons carmakers are considering price cuts is the improvement in the global semiconductor inventory. The demand for chips aimed at phones and computers collapsed in the last months, so many foundries turned to retool specifically to build semiconductors aimed at vehicles.

As such, the automotive industry is slowly seeing one of its biggest headaches easing off, and with vehicle production once again gaining traction, the ability to supply is finally aligning with the near-term global demand.

Not all carmakers are optimistic, though. Ford warned earlier this week that 2023 would continue to pose major challenges, not from a chip perspective but due to the recession that could eventually hit the United States and Europe. The American carmaker warned that the economic downturn might become a bigger concern than the semiconductor crisis, eventually impacting car sales in the majority of markets.

Previously, General Motors also warned that the chip shortage is likely to cause headwinds in 2023, explaining that the impact could also expand to the next year in some parts of the market.
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About the author: Bogdan Popa
Bogdan Popa profile photo

Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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