Toyota to hike prices on U.S. models

Doesn't mention the prius... so no change to prius invoice or msrp in USD?

 

Took some finding, but the prius is going up:

Toyota/Lexus/Scion Pressroom: Toyota Announces Mid-Year Pricing on Certain Toyota and Lexus Vehicles

Thats a press release from the toyota website, and it notes:

"The MSRP for the 2008 Prius will carry a new base price of $21,500, an increase of $400, or 1.8 percent."

They just keep jumping up...

 

Wow, I'm so glad I placed my order on Monday. Hopefully I dodged this bullet. Please deliver my new Car Toyota!

 

Half-speed ahead!

 

That's less than inflation, less than the drop in the value of the dollar. It's not a bargain for us, but I would have expected more of an increase.

 

Yep, the Prius is still a great deal. Even at $400 more, that typically would only take another couple months of ownership for it to pay itself off in fuel costs alone compared to your average vehicle.

If Toyota would move production of the Prius to the US they would be more insulated from the drop in the value of the dollar, and the car would be more appealing to customers who want to buy American. Win-win!

 

If they can maintain manufacturing quality.

 

Maybe....Toyota doesnt measure their net earnings and income in American Dollars though, as they arent an American company...so no matter where they make the car, their net revenue falls when the value of the dollar falls. Plus, another major factor has been rising commodity prices, like steel and other metals used in production, not to mention plastics, and those prices are going to hit you no matter where you build.

Really moving the production to the US only saves them on transport costs across the Pacific...which are actually a shockingly low number when compared to the price of the car, and the fact that labor is then paid in dollars and not the yen, but again i bet actual production labor costs in the car are low compared with material costs, R+D recoop costs, etc, which arent tied to the dollar at all.

Now I haven't studied this thoroughly by any means, so its possible commodity prices are lower in the US, or tariff issues would make it cheaper to produce here, etc...but those are separate issues. Simply moving production here does not protect you against the dollar changing value, it really has no effect. The problem is they SELL the car here, so no matter where its produced, its price and revenue is tied to the American Dollar.

 

Why wouldn't they? They build a whole lot of cars here in the states already a couple of different plants. Just about all the Camrys you see on the road are built in the USA out of Kentucky, I think.

Who cares if revenue falls if they can maintain profits?

Then why would they build any cars here in the USA? Wouldn't they want to keep production in Japan where they can pay Japanese workers?

 

Yes, but in the US, profits are also measured in US dollars, so when those convert to YEN, profits are also less...

There are clear advantages to having plants in the US, chief among them being the supply chain...Im not arguing that its more expensive to have plants in the US, my point is that having plants here doesnt magically make the problem of fluctuating currencies go away. It doesnt matter if they build the car in America or Japan, Toyota's overall revenue and overall product will still take a hit when the dollar falls. If Toyota decides to move plants to america to build the prius, protection from currency fluctuation wont be one of those reasons.

I understand the argument that in america, production costs are in dollars, and sales price is in dollars, so when the dollar falls, who cares (whereas cars made in japan have production costs in yen, but sales price still in dollars, so when the dollar falls, the the profit drops). But it doesnt really work this way, because commodity prices are shooting up, so the production costs in america in dollars would still go up when the dollar weakens because all that steel etc in imported from asia. It comes back to my point, no matter where you build, your profit takes a hit when the sale price is in the weak currency, aka the dollar right now.