WOLFSBURG - Volkswagen has increased prices in Germany for the first time in 18 months.
Ford quickly followed. Both companies raised prices by an average 1.9 percent.
'VW sets the pricing patterns in Germany,' said Renault Germany spokesman Ruediger Marco Booz.
VW spokesman Kurt Rippholz called the hike 'compensation for inflation.'
Volkswagen last raised prices in December 1995. Chairman Ferdinand Piech broke the tradition of yearly price hikes when he took over in 1993.
In recent years, VW has added features without increasing prices. In March, Renault Germany boss Francois Hinfray accused VW of pricing too aggressively.
But VW sales director Robert Buechelhofer said recently: 'We are still more expensive than others. It used to be 10-15 percent, now it is 5-7 percent.'
In Germany, a basic Polo (50ps) now costs DM19,490 and a comparable 50ps Fiesta costs DM18,990. A 60ps Golf now goes for DM23,750, a 75ps Escort Champ for DM24,200.
The 100ps Passat sedan sells for DM35,800; the equivalent Mondeo costs DM33,990. VW offers the Sharan CL (115ps) for DM43,700. Ford sells the Galaxy CLX for DM39,990.
Only the price of the Ka was not increased by Ford.