Toyota Hikes Prices As US Carmakers Slash to Sell

12 July 2005

As America's big three automakers vie to undercut each other [WAMN: 07-Jul-05], Toyota loftily plans to hike prices across its US product range.

The Japanese giant, which earns seventy percent of its profits in the US market, claims it is raising prices to help its struggling Detroit rivals. Toyota's motives, however, are almost certainly less altruistic.

For starters, provided the right balance is struck, it can enhance the bottom line to boost margins even at the expense of volume.

Furthermore, the move could help to defuse growing trade friction stateside by implying that Toyota is willing to help its flailing competitors in Detroit.

Lastly, the price hike is seen by some obervers as a bold double bluff, trading on consumer's intrinsic belief in a connection between price and quality.

Whatever its reasons (and there are certainly more than one) Toyota will raise the prices of its four core US models - the Prius gas-electric hybrid, the Camry, the Scion and the Lexus luxury range - by between 0.7% and 1.5% by the end of August.

And having announced the intended price hike seven weeks in advance: guess what ... there'll be a rush by American consumers to buy their objects of desire at the lower price.

It isn't only in quality of build that the canny Japanese auto giant outshines its competitors.

Data sourced from Asahi Shimbun Online; additional content by WARC staff