- According to Automotive News, Toyota is trying to raise the prices associated with personal models in a way that “doesn’t limit customer expectations.”
- The expected increase comes after the company suffered regional operating losses in the fiscal year ended September.
- Prices are also expected to rise in Europe, where the company posts a regional quarterly loss.
Death, Taxes, Rising Car Prices: Three Eternal Guarantees. After three months of regional losses and sharp increases in input costs, Toyota plans to pass on higher costs to consumers, according to Automotive News. - Toyota’s management will only have to decide exactly how much the increase will be, according to the document.A Toyota spokesman contacted by Car & Driver declined to comment.
- At Toyota’s launch event on Nov. 10, Atsushi Nagata, Chief Communications Officer, said: Announcement of quarterly results. “We are beginning to reflect these price increases in our vehicles wherever possible.”
- It’s common for new car MSRPs to increase by at least a few hundred dollars a year, and even in the middle of the year in some years. According to the Automotive News report, one solution Toyota is exploring is to increase the frequency of price increases
Another pricing strategy that many automakers, including Toyota, have used recently is to raise starting prices by reducing baselines. Last month, the company dropped the base L sedan from the Corolla lineup, introducing a higher starting price of $1,125 .The Corolla hatchback is priced at $1,800 for the SE and $2,315 for the XSE, but Toyota has slashed the Corolla Hybrid’s starting price by $1,250.
Abandoning basic options usually means losing the car with the lowest profit margin for the manufacturer. It also effectively raises the floor of the buyer’s property. Consumer price expectations are one of the factors Toyota executives use to determine price increases, according to the report
The early inflation warning came after a quarterly earnings call in November. 1. According to the report, the company should make adjustments to offset regional operating losses from the company’s North American division. According to Automotive News Europe, Toyota is also considering raising prices in Europe, and similar reasons.
The automaker revised its annual production target downward, commenting, “I don’t know when the chip shortage will go away,” blaming purchasing manager Kazunari Kumakura in part for the continued lack of semiconductor chips.
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