Toyota raising prices on Yaris, Camry
Toyota reported a 28% drop in quarterly profit today. The Japanese car maker has steered clear of the auto industry's troubles so far. Now, Stacey Vanek-Smith reports, Toyota will hike the prices on some popular models.
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Renita Jablonski: Even Toyota can't navigate the credit crunch. The company has announced a 28 percent drop in quarterly profit. Slow sales in North America and a strengthening yen are causing Toyota's bottom line to rust. So now, there will be some different numbers on certain stickers. Stacey Vanek-Smith explains.
Stacey Vanek-Smith: Toyota will raise the price for its Yaris sedan by $200. The Camry hybrid will cost about $300 more. But 2008 auto sales are expected to hit 15-year lows. So why is Toyota charging more? Because it can, says Global Management consultant Pam Murtaugh.
Pam Murtaugh: Toyota has never had to rebate, meaning pay people to buy their cars the way Detroit has. So, there's a lot of elasticity for Toyota.
But Toyota isn't immune to the industry's problems says David Cole, Chairman of the Center for Automotive Research. He says commodities prices have made materials more expensive, and the weak dollar has squeezed profits.
David Cole: Even Toyota is really facing a crunch, partly because of the softening market here, but they've been hit very hard by the strengthening of the Japanese yen as well.
Cole says new technology and stiffer fuel efficiency requirements could also contribute to higher prices.
I'm Stacey Vanek-Smith for Marketplace.
