Tiguan

Make
Volkswagen
Segment
SUV

Volkswagen has reportedly raised prices by an average of 4.4% for several combustion-engined models in its home country of Germany. According to Automotive News Europe, the automaker claims this is happening because of "significant cost increases in the procurement of raw materials, energy and equipment." The Golf, Tiguan, Passat wagon, Polo, and T-Roc are all affected and the price increases will begin on February 23.

Of those five models, only the Tiguan is sold in North America and, as of this writing, there's been no word of any price changes.

"Even Volkswagen cannot escape high inflation," VW said. "Although we are working as best we can with long-term contracts, hedging transactions and efficiency increases, the effect on costs cannot be fully compensated."

CarBuzz reached out to Volkswagen North America asking whether additional price changes are expected. "We raised prices back in November to reflect increased costs," said PR Director Mark Gillies. No additional information was provided.

Not surprisingly, German VW dealerships are very troubled by the decision. "I'm stunned. Our sales are falling and they are raising prices," said one dealer. Another German VW dealer said that the carmaker previously increased prices by almost 11% between mid-2021 and mid-2022.

In recent months, mid-year price increases in North America and elsewhere have often been limited to all-electric vehicles as a result of higher battery and associated material costs.

However, luxury brands like BMW have also boosted prices for popular models like the X3 but this was at the dealer level. BMW itself did not direct US dealers to alter pricing. Dealers here set their own pricing because they are separate business entities; OEMs only provide the Manufacturer Suggested Retail Price (MSRP). This is one of the reasons why often ridiculous markups exist. Automakers can do little to nothing to prevent them.

Looking ahead, regular price increases during existing model years are likely to be the norm as there are still a number of supply chain issues that remain unresolved as the world continues to emerge from the pandemic. Combined with rising interest rates, buying a new or used vehicle could become increasingly difficult for millions.