Toyota considers more frequent price increases necessary

So far, Toyota has changed the prices of its cars once or twice a year, but high-ranking brands expect this to be necessary more often in the near future. Following the disappointing third-quarter figures, they seem to see no other way out, reports Automotive News. That gives Toyota headaches; in order to maintain its clientele, the aim is to keep product prices within limits, but that only seems possible to a limited extent. The increased production costs – due to raw material and energy prices – and the chip shortage are the main causes.

As far as the latter is concerned, the worst is over, but the problems are far from over, says the brand itself. It expected to build a record 9.7 million cars this year, but revised that target to 9.2 million last month. Although that would still be a record, the top of the brand is not sitting relaxed. Production numbers rose, but total operating profit fell by a quarter last quarter. The brand even recorded losses on the American and European markets, where it still made a profit last year. The brand’s operating profit margin decreased from 9.9 to 6.1 percent worldwide.

The price of yen does not help

The brand has recently increased prices in line with inflation and increased material costs, but now deems more and more substantial price increases almost inevitable in order to remain financially healthy. Not only the cost increase, but also the exchange rate development of the Japanese Yen against the dollar is currently unfavorable for the brand. The discontinuation of the brand’s activities in Russia also brought an unexpected setback. The future will show how much the factors combined actually contribute to more expensive Toyotas in the showrooms. In the US, they have reportedly already started to increase prices. So if you are considering buying a new Toyota in the Netherlands, it is probably smart not to put the decision too far ahead of you.