TTAC Called It: Toyota to Hike Prices

Robert Farago
by Robert Farago
ttac called it toyota to hike prices

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.

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  • Ronin Ronin on Jun 27, 2008

    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.

  • Tulsa_97sr5 Tulsa_97sr5 on Jun 27, 2008

    @ 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.

  • Jimmy2x Jimmy2x on Jun 28, 2008

    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.

  • Lewissalem Lewissalem on Jun 28, 2008

    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.