DETROIT, JUNE 22 -- General Motors Corp. is planning to raise the price of its new line of front-drive intermediate cars as much as $1,400 over the older rear-drive cars they will replace, a weekly industry publication said today.
Prices of the 1988-model Buick, Oldsmobile and Pontiac coupes may be raised between $600 and $800 over current models, while the sedan versions set to debut after 1988 may be raised at least $1,000 to $1,400, Motor Industry Week quoted "well-placed GM insiders" as saying.
GM spokesman Harold Jackson called the story "speculative" and said the process has not yet been established. "We have every intention of pricing these cars to be competitive in the marketplace," he said.
When GM introduced its front-drive replacements for its rear-drive large cars beginning in the 1986-model year, prices went up between $1,200 and $1,400. But a GM spokesman said that more standard equipment, such as air conditioning, was added to the cars.
GM's current mid-sized coupes -- the Buick Regal, Oldsmobile Cutlass Supreme and Pontiac Grand Prix -- currently sell for between $11,500 and $12,400, the publication said.
GM will begin selling its new line of front-drive intermediates, known as its GM-10 line, this fall. The Buick Regal will debut first, followed by the Oldsmobile Cutlass Supreme. The new version of the Pontiac Grand Prix will debut in March 1988.
Analysts said the price increases may mean GM will have a tough time regaining any part of its eroding market share. In 1986, it ended up with a 41 percent slice of the overall U.S. market, including imports, compared with 42.6 percent in 1985 and 44.3 percent in 1984.
Automotive analyst Maryann Keller of Furman Selz Mager Dietz & Birney in New York said the price hikes could force GM to place buyer incentives on the new cars almost immediately -- just as it had to do with the introduction of its new Chevrolet Beretta and Corsica compacts this year.
Christopher Cedergren, a senior analyst at California research firm J.D. Power & Associates, called the Beretta-Corsica launch one of the poorest in recent history despite the millions of dollars GM spent to promote it.
"New model launches are not having the success they had in the 1960s and 1970s," Cedergren said last week at an analysts' meeting in Southfield, Mich. "The Beretta-Corsica and the new line of GM luxury cars introduced as 1986 models are some of the poorest new-model launches."
Analysts said GM's new GM-10 models need to do very well in the marketplace for the giant car maker to sell about a million cars a year -- nearly double what it did with the current lineup. They also must face Ford's successful Taurus and Sable sedans, which have done well in attracting car buyers previously loyal to other brands.
However, other analysts point out that the new line of GM-10 cars will initially be coupes and not compete directly with the Taurus and Sable, which are available only in sedans or station wagons.