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European carmakers to raise prices

July 6, 2008 at 6:56 PM   |   Comments

TURIN, Italy, July 6 (UPI) -- Four European carmakers are raising sticker prices for their new cars amid rising costs for raw materials, manufacturers say.

Renault, Fiat, Volkswagen and Nissan, which has an alliance with Renault, have said they are raising their prices, and more price hikes are likely, Fiat group Chief Executive Officer Sergio Marchionne told Automotive News Europe.

"Increasing raw material prices are forcing the industry to continuously review its pricing policy. That's why we are considering another increase of Fiat Group Automobiles list prices of some percentage points from September," Marchionne said.

The average cost of raw materials in a car rose to about $1,400 in April from about $157 in April 1999, a cost analysis by Global Insight found.

"All car manufacturers will increase prices. It's a question of time. How can you not increase prices if the price of raw materials goes up 100 percent?" Carlos Ghosn, chief executive officer of Renault and Nissan, said at the automaker's annual shareholders meeting.

Steven Armstrong, chief operating officer of Volvo, agreed.

"I think it's pretty inevitable that everybody will have to raise prices, given the direction that raw materials prices have taken," Armstrong said.

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