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Toyota to up prices in U.S. this October

06/11/2005

The Asahi Shimbun

Toyota Motor Corp. plans to raise the prices on most of its U.S. models in October to help its struggling rivals in Detroit and to prevent trade friction from erupting, sources said.

The price hikes are expected to average 2-3 percent.

The Toyota Camry, the best-selling midsize sedan in the United States, will cost several hundred dollars more than its current price of around $20,000 (2.2 million yen).

Toyota has no immediate plans to significantly revise prices in Japan.

In the United States, Toyota plans to reduce incentives and increase wholesale prices, which will force dealerships to make up the difference with bigger price tags.

In 2004, Toyota sold 2.29 million vehicles in North America, an increase of 10.6 percent from the previous year.

The fortunes of U.S. automakers went the other way, however. General Motors Corp. this week announced it would cut 25,000 jobs by 2008. It also plans to raise vehicle prices.

Concerned that Toyota's success in the United States could be viewed as coming at the expense of U.S. automakers, Toyota Chairman Hiroshi Okuda has repeatedly said Toyota would need to adjust prices.

Okuda also wants to stave off any potential trade friction that could lead to the "Japan bashing" seen in the United States in the 1980s and 1990s. In the U.S. auto industry, vehicle prices usually change when a new model year begins. Toyota has raised prices due mainly to foreign exchange fluctuations or when equipment is added to new models.(IHT/Asahi: June 11,2005)