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From the Detroit Insider:

Chrysler hikes truck, car prices

Detroit automaker says buyers won't feel the pinch as stickers climb less than 1 percent.

Chrysler on Thursday raised the sticker price on all Chrysler, Dodge and Jeep vehicles by $80 to $100, a move that could allow the automaker to generate new revenue without lowering incentives.

Chrysler, which is offering the highest discounts in the auto industry, is taking a different tack from General Motors Corp., which has lowered sticker prices and rebates on most of its models.

In February, Chrysler discounted its cars and trucks by an average of $3,881. The company said it raised sticker prices Thursday after evaluating a number of factors, including the price of raw materials and components, as well as the overall competitive environment in the industry.

Analysts said the modest price increases probably won't be a major boost to the automaker's bottom line.

"When I look at the Jeep Grand Cherokee, they spent $5,100 on incentives per car in February," said Jesse Toprak, an analyst with Edmunds.com, a research Web site for car buyers. "In an environment where you spend that much, increasing an MSRP by $100, it isn't going to do anything."

Chrysler is the only Detroit automaker that made money on its North American automotive operations last year, but it faces the same pricing pressures as other automakers.

The increase includes top-selling vehicles such as the Chrysler 300C sedan, Dodge Grand Caravan minivan and Jeep Grand Cherokee.

Clarkston dealer Chuck Fortinberry said he doesn't think a $100 increase will scare off customers.

"Across a million vehicles, $100 might make a difference to Chrysler, but to me and the average consumer it doesn't mean anything," said Fortinberry of Clarkston Chrysler-Jeep.

Detroit's carmakers have traditionally tweaked prices throughout the model year, but so far this year, GM and Ford mostly have refrained from doing so.

"The only thing that's perhaps different is that Ford and GM did not go through the route of increased pricing and incentives whereas with Jeep, it's continued business as usual," Toprak said.

Kevin McCormick, a Chrysler spokesman, said that even with Thursday's increase, sticker prices on Chrysler vehicles are increasing by less than 1 percent and consumers shouldn't feel the pinch.

"There's no significant price movement on those vehicles. It's imperceptible to consumers," he said. "They're not going to see an increase in terms of what they pay."

Alan Helfman, one of the largest Chrysler dealers in the nation, doesn't expect new sticker prices to affect sales.

"(Consumers) won't notice it, not with all the deals going on," Helfman said. "If they do, it won't matter to them. That's such a negligible amount."

Joe Barker, an analyst with Farmington Hills-based CSM Worldwide Inc., said automakers are always looking for the perfect pricing strategy that can optimize sales and profits.

"You don't want to overprice … and you don't want to underprice either," he said. "You want to hit the sweet spot, and the sweet spot is hard to determine."

A better deal?
The Chrysler Group is raising sticker prices on all Chrysler, Dodge and Jeep models to bolster revenues. Transaction prices have been falling because of large incentives.
Model Average transactionprice/March 2006
Jeep Commander $33,767 $31,683
Jeep Wrangler $23,236 $23,905
Jeep Grand Cherokee $28,183 $29,679
Jeep Liberty $22,528 $21,934
Chrysler Pacifica $27,342 $26,626
 
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