Automotive Journal

General Motors Corp.'s chief financial officer Fritz Henderson told the Associated Press that car prices may rise because of increased prices on raw materials, increased technology costs and fuel regulations from the government.

Fritz Henderson said the industry has less manufacturing capacity than in the past and therefore less pressure to sell vehicles cheaply just to move inventory.

It also faces higher raw materials costs, rising technology costs and increased costs from fuel economy and other government regulations, he said.

While the U.S. market still is competitive, "you could potentially see a significant change from what we've seen in the last eight or 10 years," Henderson said during a speech to the Automotive Press Association in Detroit.

Henderson said he didn't know when prices might start to rise, but he sees pressures because costs already have gone up and automakers are spending a great deal on new technology. GM has also reduced its sales to low-profit fleet buyers such as rental car companies, he said.

When will this price increase happen? Fritz Henderson doesn't know. He told the AP: "You're going to see a lot of costs in the car today that's already happened, whether its steel or raw materials or precious metals, and then you combine the technology on top of it, and I think you're going to see pressure. The question is when does it manifest itself in the market? I don't know."

Some foreign car manufacturers keep coming up with cheaper cars making it difficult for domestic car makers to raise prices.

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