Automakers Raise Prices as Sales Boom Continues
Toyota to bump up sticker prices starting in May, while Hyundai scales back on discounts.
Buoyed by what's expected to be the strongest month for new-car sales since 2007, some automakers are taking the bold step of raising prices. Starting in May, Toyota announced it will increase the sticker prices of six fuel-efficient cars in its fleet, namely the 2012 Prius V, Highlander Hybrid, Camry and Camry Hybrid, Tacoma and the 2013 Scion tC. In a similar move, Hyundai will decrease discounts offered to consumers by 10 percent.Hyundai's approach, to roll back some of the deep discounts it relied on during the height of the recession, will have a similar effect on consumers' wallets. John Krafcik, chief executive of Hyundai Motor America, says the company's average transaction price is now 96.5 percent of the sticker price, which is about 10 percent more than three years ago.
Given that March sales are up 14 percent over March 2011 and 26.5 percent over last month, according to auto-pricing firm TrueCar.com, it's not out of the question that other carmakers will jump on the price-hike bandwagon.
“We are looking at a record-breaking month for many manufacturers in March with Hyundai, Nissan and Volkswagen expected to have their highest unit sales ever in the U.S.,” TrueCar.com analyst Jesse Toprak says. “We also forecast that Chrysler, Ford, GM, Honda and Toyota will have an extremely strong month, with some of the highest unit sales in years."
Fuel-efficient cars aren't the only ones flying off lots; Forbes is reporting that new-car sales in March are up across the board, regardless of vehicles' mileage. Easier to access credit is one reason why. "Average credit scores for new-car buyers are at their lowest levels since the first half of 2008," says Edmunds.com senior analyst Jessica Caldwell.
By targeting the hottest sector of the industry -- the highly fuel-efficient models -- and raising prices by only a small amount, Toyota makes it unlikely that buyers will balk. Especially considering the timing of the spike; May is typically the most bullish month of the year for car purchases.
While Obama doesn't have complete control over fuel prices, he can definitely have an impact. For example, his latest half-baked proposal to take "subsidies" away from U.S. oil companies because they're too profitable. (Is there any such thing as a corporation being too profitable?) Just who do you think the oil companies are going to pass those billions of dollars in added taxes onto? Consumers, that's who. Obama will raise their taxes and they'll raise the price at the pump. Yeah, that'll teach those big bad oil companies. Obama doesn't have enough brain power to understand the consequences of what he's done to kill businesses and kill jobs.
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