Supply and demand are funny, but still very predictable things. Overall, the economy is still not doing too well. That's true in the U.S. and elsewhere. People are still hesitant to make major purchases. So you would think demand is down.

 

Yet, compared to how bad the U.S. auto industry has been of late, 2011 has seen a lot of growth from Chrysler Group, and our friends at GM, Ford and other automakers. So with demand up, the costs of many of our raw materials and other production factors also are going up.

 

But we don't want to upset the upward trend in SUV, truck, car, etc., sales by raising prices in order to cover the higher production costs.

 

So, what do we do?

 

We work closely with suppliers to find ways to offset those costs so we all can stay in business, and the car shoppers can still afford to buy our SUVs, trucks, cars, etc. Below, our Senior Vice President of Purchasing & Supplier Quality Dan Knott talks about how Chrysler Group works with suppliers to minimize production cost increases, and minimize their impact on our vehicles' MSRP.