GM to raise prices on 2009 models, cut production

General Motors Corp. plans to raise prices on 2009 models by an average of 3.5 percent despite a tough market that is forcing the automaker to cut production and discount its 2008 models.

Company officials said in conference calls Monday to dealers that the increases will allow GM to recover only part of the rising cost of steel and other commodities and the cost of safety and other features on the new models. The increases will amount to about $1,000 per vehicle.

GM also said Monday it will run a sale from June 24 to 30 to help clear out high inventories of 2008 pickups, sport utility vehicles and larger cars. The sale includes zero percent financing for up to 72 months.

The nation's biggest automaker already had increased the prices of its 2008 model year vehicles twice because of rising commodity costs, GM spokesman John McDonald said.

The moves come a little more than a week after Chrysler LLC announced a 2 percent increase in the price of its remaining 2008 vehicles. Seattle Times