Toyota to Raise Prices Slightly on ’86 Models
Despite growing demand for Japanese cars, Toyota said Friday that it will raise its car and truck prices by an average of just 1.3%, or $117, for the 1986 model year--well below the average increase announced recently by General Motors, Toyota’s main domestic competitor.
The modest increase by the largest Japanese auto importer is likely to set a pattern that will be followed by most of the smaller Japanese auto makers when they announce their prices over the next few weeks. Besides Toyota, the only major Japanese firm to announce any 1986 prices so far has been Nissan, which said last month that it would increase its prices on four carry-over models by just 1% in the 1986 model year.
By contrast, the domestic auto makers have so far been following much more aggressive pricing strategies. GM announced late last month that it will raise its prices by an average of about 3% in 1986, reflecting the company’s optimistic forecast for continued strength in domestic car sales next year.
Chrysler said in July that its price increases will average between 2% and 3%. Ford has not yet announced its 1986 prices.
Toyota officials indicated that their pricing decision was based on concerns that the market for small Japanese cars may soon be saturated, now that import restrictions have been eased and both Nissan and Honda are producing additional cars in the United States.
“This increase reflects increased competition,” said Robert McCurry, a senior vice president of Toyota Motor Sales and head of American sales for the auto maker. “The overall automotive marketplace remains strong but is growing increasingly competitive.”
But, like the domestic auto companies, Toyota calculated its 1.3% increase on a comparison of cars from 1986 and 1985 that carried the same amount of equipment, instead of a comparison of base models from each year. So, since many of Toyota’s base models will come with expensive standard equipment that was optional last year, the average percentage price increases on 1986 base models compared to 1985 base models will actually be greater.
For example, the base price on the front-wheel-drive Corolla will be $7,148 in 1986, up 2.1% from the $6,998 price on a 1985 model that carried all of the optional equipment that is now standard. But a stripped Corolla last year cost just $6,938, so the base-price increase is actually 3%. On a Camry, the new base price will be $9,378, up 2.1% on a comparably-equipped basis from $9,183 but up 4.8% from 1985’s base price of $8,948.
Faced with tough competition from both the domestics and the other Japanese firms in the light-truck market, meanwhile, Toyota said it was leaving its truck prices unchanged from 1985. Nissan also said earlier that it was freezing its truck prices this year.
