Toyota Canada slashes prices as loonie strengthens

[regfootball]

http://www.thestar.com/article/299753

whatdya think, carbiz? does toyo figure on a tough year in the US so will try to make up for it in CA?

Toyota slashes prices as loonie strengthens

TheStar.com - Business - Toyota slashes prices as loonie strengthens

Retail sticker rollbacks seen as a big challenge, opening competitive war

February 02, 2008

Tony Van Alphen

Business Reporter

Auto shoppers will probably start seeing even lower prices on new vehicles soon after Toyota rocked the industry yesterday by rolling back retail stickers on many models because of the continuing strength of the dollar.

Analysts say Toyota Canada's move to drop the key manufacturer's suggested retail price by up to several thousand dollars on 16 models including the Lexus brand will trigger similar steps by rivals, or higher incentives.

Furthermore, the company also suggested it would drop the MSRPs on the popular Corolla, Matrix and Camry models when new versions appear in showrooms during the next few months.

"This is a very significant," said Richard Cooper, vice-president of auto researchers J.D. Power and Associates in Canada.

"Toyota has thrown down the gauntlet on the competition. I think consumers will now see different strategies from automakers on beating the competition on price. It's going to be pretty exciting. Shoppers will be the winners."

Auto analyst Dennis DesRosiers agreed. "On the surface, I believe consumers will win, and win big. The question now is not whether other companies will follow but how they will respond."

MSRPs in the U.S. that arae much lower in Canadian currency than Canadian prices raised the ire of consumers here last fall.

Some luxury automakers such as Audi and Mercedes-Benz chopped their MSRPs in Canada by more than $10,000 on high-end models late last year, but companies with full product lines were reluctant to make that leap.

Instead of reducing suggested retail prices, most automakers have been offering short-term deals, including thousands of dollars in cash-back offers, delivery allowances, free gasoline, no-interest financing and other sweeteners.

Toyota, which will also continue using some incentives, said it decided on lowering MSRPs because the dollar shows no sign of falling back from big gains in value during the past year.

Yesterday, the dollar's exchange value closed up almost a full cent to $1.006 (U.S.).

"It's very clear the dollar is settling in a higher range than it historically has," Stephen Beatty, managing director of Toyota Canada, said yesterday. "We said rather than use short-term incentives, let's be more transparent by rolling down MSRPs."

DesRosiers, president of DesRosiers Automotive Consultants, said automakers rarely make big adjustments in MSRPs because it can cause havoc in their budget and product planning, inventories and marketing.

"It is one of the most complex things an automaker does," he said. "It is not taken lightly and is very sensitive."

Spokespersons for Chrysler and Ford said they had no new immediate plans to follow Toyota's lead.

Cooper said GM adjusted its MSRPs in Canada slightly last year but Toyota's cuts are much larger.

Toyota's MSRP reductions range from 3 per cent to 13 per cent. For example, the price of a Yaris hatchback drops 5 per cent, or $750, to $13,165 (Canadian); the RAV4 sport utility vehicle falls 6.8 per cent, or $2,000, to $27,400; the Tacoma pickup truck drops 10 per cent, or $2,290, to $20,470, and the Lexus IS sports car decreases 13 per cent, or $4,650, to $31,900.

Meanwhile, consumers are still grumbling about price disparities with the U.S. and moves by some companies that erase savings when shoppers try to import new and used models into Canada.

One consumer complained yesterday that the MSRP on the Toyota RAV4 model is still noticeably less expensive in the U.S. after the company's price reductions.

But a Toyota spokesperson said MSRPs in the U.S. don't reflect the cost of extra equipment to meet government regulatory standards here, duties and taxes.

Edited February 4, 2008 by regfootball

[Polish_Kris]

whatdya think, carbiz? does toyo figure on a tough year in the US so will try to make up for it in CA?

What tough year? They're doing fine. They're doing it because the US dollar is weak, and people are jumping the border and shopping for cars in Buffalo, or any other border city.

[CARBIZ]

Well, Reg, you've pulled a quote from the Toyota Star, so excuse me while I have a good chuckle.

I like these gems: "Toyota has thrown down the gauntlet on the competition."

"This is very significant."

I guess it is cheaper than continuing to pay off the media.

They are pretty much the last car company to do anything about their prices. GM, Ford, Chrysler and Honda already did so. Significantly, Toyota's sales were up a miniscule 3.1% in January, in a market that was up 13%. GM was up 18% (climbing nearly 1 1/2 points of market share), Ford nearly 10% - even HOnda managed 76% in a single month.

So, yeah - Toyota is nervous. The price of kool-aid is going up, along with oil.

[Z-06]

Well, Reg, you've pulled a quote from the Toyota Star, so excuse me while I have a good chuckle.

I like these gems: "Toyota has thrown down the gauntlet on the competition."

"This is very significant."

I guess it is cheaper than continuing to pay off the media.

They are pretty much the last car company to do anything about their prices. GM, Ford, Chrysler and Honda already did so. Significantly, Toyota's sales were up a miniscule 3.1% in January, in a market that was up 13%. GM was up 18% (climbing nearly 1 1/2 points of market share), Ford nearly 10% - even HOnda managed 76% in a single month.

So, yeah - Toyota is nervous. The price of kool-aid is going up, along with oil.

So Toy was an ass and arrogant thinking people will still buy their crap at higher prices, when other manufacturers followed the exchange rate trend and now it claims sanctity? Priceless.......

Toyota show perceptions of moving forward.

[rambaran]

actually their radio adds say that they've converted incentives into lower prices. what does that mean exactly???

[vonVeezelsnider]

actually their radio adds say that they've converted incentives into lower prices. what does that mean exactly???

It means NET total they've done nothing.

[gm4life]

It make mention of a new Camry... When is Toyota bringing a new Camry did the new current fugly verison come out in 2007 for the US or isn't the new one in Canada yet?

[Polish_Kris]

It make mention of a new Camry... When is Toyota bringing a new Camry did the new current fugly verison come out in 2007 for the US or isn't the new one in Canada yet?

First of all, fix your grammar, second, do some research. The current Camry was released for all of North America, and yes it's doing really good. Especially the hybrid version, since the Federal Government is giving tax breaks for hybrid owners.

[FAPTurbo]

I don't know what the big deal is. Chrysler has been running TV, and print ads for quite a while about the re-adjusted pricing, and I have yet to read an article about that.

[CARBIZ]

The apple cart is in serious danger of being toppled up here. In general car prices have been significantly higher than in the U.S. and Toyota is loathe to actually release any REAL incentives (unless you call 0% financing for 36 months a real incentive to anyone but Bay Street lawyers), whereas, GM has released a battery of incentives ($9k credit on the Corvette and 1.9% financing, for example.) Toyota is terrified of upsetting the myth that their vehciles depreciate less than their American counterparts. Since Toyotas are so over-priced (along with BMWs, I might add) a lot of import dealerships thrive on their 'in-house' leasing businesses. Now, those in-house leasing companies are in serious $h! because those X5s and Lexus coming off those 'closed' leases are worth $8k less than the buy back states. OOOPS. The company I left is awash in 2007 Camrys and high end vehicles they can't dump.

The dealers are screaming, too. A lot of them have spent several millions in renovations, forced on them by Toyota, and now the foundations are getting a little wobbly. Couple that with the fact that your typical Lexus owner thinks he/she is all that and a bag of chips, they were among the first to slink off to the U.S. and make their purchases there. (Me, Me, Me is their mantra.) I mean, if you are going to screw your manufacturing base, why not screw the retailers, too? This is a perfect storm for Toyota retailers.

Welcome to the Big Leagues, Toyota.

[IfICouldWouldYou?]

The Camry is a nice car. I like it almost as much as the Honda Ridgeline. I think everyone should drive a Toyota.

[Z-06]

The Camry is a nice car. I like it almost as much as the Honda Ridgeline. I think everyone should drive a Toyota.

Go back to the cave you came from.

[IfICouldWouldYou?]

Cave? Luxury! I crawled out from under a rock.