Ford has increased prices on its 2011 models by an average of USD 124 or 0.4% the third price increase since January 2011 as the automaker tries to offset rising prices for steel, plastic and other materials.

Mr Todd Nissen spokesman of Ford said that Ford executives told dealers last week. It comes after a similar increase in April, which also averaged 0.4% or USD 117 per vehicle and another one in January. He added that "This brings our average price increases this year to 1.3% or USD 375 on average, the average price increase for all automakers in the US is about 1%."

General Motors last month raised prices by an average of 0.4%, or USD 123, for the average 2011 model. Toyota's 2011 models rose in price May 1st 2011 with increases ranging from USD 200 on the Yaris to USD 900 on the Land Cruiser and Sequoia. The increases ranged from 1.2% to 2.1%.

Steel and aluminum prices remain at or near three year highs. An average car contains about 325 pounds of aluminum, and because aluminum refining requires so much electricity, the cost of coal also has an impact on the cost of aluminum.

Automakers also have been able to raise prices because their inventories are small, partly because of disruptions in the supply of electronic components made in Japan, where production was affected by the March 11th 2011 earthquake's aftermath.

Manufacturers are spending on average about USD 2,320 per vehicle on marketing incentives or about 14% less than a year ago. So far, consumers are willing to pay the higher prices either because they want better fuel economy or they simply have driven old vehicles as far as they will go.

"This is as good of a time for price increases as there has ever been. This is not going to deter many customers from buying."

According to TrueCar.com, the average new car in the US sold for USD 29,602 in April 2011, up by USD 324 in April.

(Sourced from www.freepress.com)