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Automakers increase new car sale prices as sale boom continues

Buoyed by what's expected to be the strongest month for new-car sales since 2007, some OEMs are taking the bold step of raising prices.

By Claire_Martin Apr 2, 2012 7:33AM
Prius V Photo by Toyota.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.

The new Toyota price tags will be $90 to $250 more, depending on the model -- an increase of up to 1.5 percent. Toyota didn't state its reason for raising prices, according to the Los Angeles Times, but given the combined uptick in gas prices and car sales, one obvious explanation is simply that it can.

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.

5Comments
Apr 3, 2012 9:05AM
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Steve-80, yeah, it stinks to be president.  After 4 years Obama is STILL blaming Bush for things he should be blaming Nancy Pelosi and Harry Reid for.  But turnabout is fair play and now Obama can be blamed for things beyond his control too.  I hoping it's enough to keep him from being reelected and destroying this country further.

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. 


Apr 2, 2012 11:21AM
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Cars and gasoline aren't the only things going up in price.  As Obama destroys the value of the dollar and it becomes worth less and less everyday, fasten your seatbelts for some hyper-inflation....because it's coming.
Apr 3, 2012 8:31AM
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Verum, I'm not defending Obama, but the value of the dollar had been declining long before Obama was in office, so you can't blame him.  In addition, he has no control or impact over this, the congress and senate do.  I find it both sad and scary that so many people in this country don't understand how the government works.  They blame the president for everything, including things the president has no control over.
Apr 3, 2012 4:38AM
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Gas prices are forcing just about everything to go up in price and politics has nothing to do with it. Until we break away from the grips of the oil companies this will continue to happen. I don't see that happening soon but someday it will because people will get sick of the price gouging from oil companies.
Sep 19, 2012 11:10PM
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The only long-term answer to high petroleum/gas prices is to have limited dependence/need for it. The money we're spending trying to go to mars should be spent on research/development of less expensive modes of travel.
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