First, this was an easy call. Commodity costs have jumped significantly in the last year, eating into Toyota's– and everyone else's– profits. Second, as the new world leader, ToMoCo is best positioned to pass on those costs. Quoted by Automotive News [sub] CEO Carlos Ghosn admitted as much. "It's very, very difficult to move in a market without somehow the leader of the market (making a) move." Third, you gotta read between the lines here. "Our basic principle is to continue to work on cost reductions within the company first," said Toyota spokesman Paul Nolasco. "But we won't be able to avoid thinking about price hikes in the future considering a recent jump in raw materials costs." How… inscrutable. As I reported in General Motors Death Watch 182, here's real deal: Toyota wants to see what happens to the other guys– specifically GM– before upping its profits. "We'll make a final decision after evaluating April-June sales and production costs," a "top Toyota official" told The Nikkei business daily.
10 Comments on “TTAC Called It: Toyota to Hike Prices...”
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As ToMoCo moves towards being the world’s number 1 car company the other ompanies will be following their lead.
As GM implodes, Toyota gets richer.
Do people still actually buy 4Runners? Why, for the love of all that’s holy?!
For all you folks that believe the oil companies collude on pricing, here is a perfectly good example of legal collusion.
Toyota just sent out a message to all the other members of the oligopoly that they think it’s time to raise prices. They won’t move unless and until the others respond in kind.
The closest (in my knowledge) that happens in oil (other than the admitted collusion at OPEC meetings, and between oil states) is the constant announcements of plans to increase or decrease capacity that they all watch the others make. All the pol’s can make noise about investigations, but this is what they will likely find.
Well there you have it.
Two possible moves they could’ve taken:
Played on the “crisis” and stood by the consumer in their time of economic difficulty. Very good image builder.
OR
Bent us over even further, making it MORE costly to save money.
Remember Pearl Harbor?
Do people still actually buy 4Runners? Why, for the love of all that’s holy?!
Because it’s a toyota, why else would they buy one?
Remember Pearl Harbor?
But we won that war, doesn’t that count for something?
Consumers by and large have not gotten real raises this century. I understand that retailers such as car dealers and their manufacturers face higher costs, and wish to pass those along.
The problem is that consumers are strapped. The carmakers may find that, as price sensitive as consumers are today, they are becoming even more so. Not to mention, qualification for loans of all sorts is becoming more difficult.
The market will determine whether the carmakers really have the pricing power. I doubt it. I look for larger and larger incentives on new cars.
@ gawdodirt
Well there you have it.
Two possible moves they could’ve taken:
Played on the “crisis” and stood by the consumer in their time of economic difficulty. Very good image builder.
I guess we’ll see what they actually do, but I agree with ttac and expect them to raise prices. There are a lot of people in the US who are still no where close to considering Toyota, and some percentage of those folks would see a GM shuttering as Toyota’s fault and would never buy from Toyota. I think they’ll make the pragmatic choice to spend some of the goodwill they have with their customrs, and no doubt lose some sales in the short term to avoid becoming the whipping boy for the death of the big 3.
Axel:
Do people still actually buy 4Runners? Why, for the love of all that’s holy?!
Just bought a new one a couple of months ago. Not for use as a commuter car, but as a trip car. Going to Alaska and the Canadian Rockies and really do not want to tackle that with the wife’s Camry.
Some of us just have different needs for a vehicle.
I’m anticipating a cheapening of the product. We are seeing this in the latest Camry. It will be interesting if this will hurt the bottom line, and if an outside competitor like Subaru or Hyundai can improve and poach some sales.