Toyota Motor Corp, the world’s second-biggest automaker by annual vehicle sales, is raising its US prices later this month amid growing worries about profit growth in the US market.
Starting in the middle of this month, Toyota will raise the price on some models, including the 2008 Yaris sedan by US$200, or 1.6 percent, to US$12,425. The 2009 Camry will go up US$200, or 0.9 percent, to US$18,920, the automaker’s US unit said in a statement.
The hybrid Camry, introduced as a 2007 model in late 2006, will cost US$300 more, or 1.1 percent, at US$25,650, a statement released on Friday said.
Like other Japanese automakers, Toyota is enjoying sales growth while US automakers are struggling. Soaring gas prices have increased demand for smaller, fuel-efficient cars that Japanese automakers are reputed for.
Toyota faces a challenge in maintaining profits partly because of the recent decline in the US dollar, which erodes the value of overseas earnings of Japanese exporters. Worries are also rising about how a US economic slowdown may hurt sales.
Toyota is set to release earnings today and could report its first profit drop in nearly a decade.
But it’s still faring better than its US rivals. General Motors Corp lost US$3.3 billion in the first quarter. Ford Motor Co had a surprise profit of US$100 million in the first quarter but expects to lose money this year as the US auto market deteriorates.
Atsushi Kawai, auto analyst with Mizuho Investors Securities in Tokyo, said raising prices about 1 percent wouldn’t make up for the damage Toyota’s bottom line was expected to suffer from a weak dollar. The dollar, trading at about ¥114 last year, fell below ¥100 in March and is now trading at around ¥105.
But he noted Toyota raises prices about this time every year, and the hike was routine.
“Outside people are the ones giving special meaning to the decision,” because of the concerns about the US market, he said in a telephone interview. “It is a fact that Toyota is losing some of its momentum.”
GM, Ford and Chrysler LLC saw double-digit US sales declines last month compared with April last year, while Toyota’s edged up 3 percent.
But during the same period, Honda’s and Nissan’s US sales were up about twice that much.
Nissan has already raised US prices last month by between US$170 and US$480 on models such as the Versa Hatchback, Altima sedan, 350Z Roadster and the Pathfinder sport utility vehicle. Honda said it had no plans so far to raise its US prices.
Kawai said more time was needed to assess whether Toyota sales would continue to lag even after new models, including the remodeled Corolla, come out.
Toyota is also raising the US prices of some Lexus luxury models. Among others, the Lexus IS entry sport sedans’ price will rise 0.9 percent, or US$300, overall so the IS 350 will cost US$36,305. The 2008 Lexus IS F high-performance sports sedan won’t change its pricing, it said.