GM Will Raise Prices on Some 1986 Models by 3%

Times Staff Writer

General Motors announced Friday that it will raise the prices on most of its 1986 model cars by an average of 3% over its 1985 prices.

However, because the 3% increase was calculated based on what the company called "comparably-equipped" models, and since the new models include standard equipment that was optional on the earlier models, actual sticker prices may reflect a higher increase.

The No. 1 auto maker said the increase reflects higher costs for materials, labor and other manufacturing expenses as well as "improvements" on the 1986 models, which are scheduled to be introduced Oct. 3.

At the start of the 1985 model year, GM raised its prices an average of 2.3%. However, in January, the company hiked prices another 2%, leading to speculation that another increase is possible during the 1986 model year.

A GM spokesman said the price changes on 1986 models will range from a 3.4% price reduction on the Chevrolet Camaro to a 3.8% increase on the Chevrolet Corvette.

Auto analyst John Hammond of Data Resources, an economics consulting firm in Lexington, Mass., said the increase was in line with expectations. GM's car sales are expected to remain at 1985 levels next year, he said, leaving the auto maker with "no option but to reduce costs and increase prices" if it is to improve earnings.

Hammond said that, given the extensive use of sales incentives by domestic auto manufacturers, "GM will probably come out with a sales campaign which will offset a portion of the price increase."

GM said the price of most options will remain unchanged. However, it said it will raise the price of V-6 and V-8 engines between $50 and $100 and the price of optional automatic transmissions by $40.

The increases are part of an effort to encourage buyers to buy more fuel-efficient standard components, the company said.

Although neither Ford nor Chrysler have officially announced the prices for their 1986 models, Chrysler said it expects to increase prices by 2% to 3%, and Ford is expected to follow suit.

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