Again citing the rising cost of plastics, steel and other raw materials, Ford Motor Company (NYSE:F) has announced their third vehicle price increase since January of this year. The increase is model specific, but amounts to 0.4 percent per vehicle, or an average of $124. Ford communicated the price increase to dealers last week, and it will most likely go into effect with new vehicle production beginning immediately.
Ford raised prices in January of 2011 and again in April of 2011, something that consumers have not been accustomed to in recent years. Per Ford spokesman Todd Nissen, the latest increase, “brings our average price increases this year to 1.3 percent, or $375 on average.” Nissen further justified Ford’s latest price hike by advising that the average increase for all automakers in the U.S. in 2011 has been about 1 percent.
Ford’s latest bump in list prices is likely in reaction to a price hike from General Motors, who also raised pricing by 0.4 percent last month.
Supply and demand isn’t helping consumers, either. Dealer inventories are lower than usual, due in part to supply disruptions caused by the March disasters in Japan. Low inventory and high demand translates to higher retail prices, and current three-year-high costs for both steel and aluminum mean that prices are likely to rise again before the year is out.