Toyota Raising Small Car Prices

Toyota has announced that it will raise prices on some vehicles in the United States this month -- and, as you might expect in this economic climate, the price increase applies mostly to hot-selling small cars. 

Bloomberg explains, "Toyota will increase its suggested retail price for the Prius, a hybrid vehicle, by 1.8 percent to $21,500, and for the Yaris sedan by 1.6 percent to $12,425, the automaker said in a statement on its Web site. The changes are effective mid- to late-May."  Prices on larger models will also increase, but not as sharply as those of the Yaris and Prius.

JCN adds, "Toyota will lift its suggested retail price by 0.9 pct for the 2009 model year Camry sedan, 1.6 pct for the 2008 Yaris sedan and 1.8 pct for the 2008 Prius hybrid vehicle." According to the Wall Street Journal, the Yaris is "the biggest seller in its segment," defined by industry analysis firm Autodata as the "lower small" class of cars.   Wired says that Yaris sales have "spiked 46%" since last year.

AFP notes that, despite the move, "Toyota is widely expected in the current business year to March 2009 to suffer its first drop in operating profit in nine years because of sluggish US sales and a stronger yen, as well as surging costs of steel and other materials."

Small cars were the only segment of the automotive market to see growth in April, when overall U.S. auto sales declined to levels not seen in a decade.  Toyota's move is not unexpected -- It makes sense that the price would increase on the hottest-selling cars.  Many consumers accustomed to buying SUVs have been surprised to learn, however, that the listed price of a Prius or Yaris is pretty close to the final price you have to pay for one -- dealers don't have much room to negotiate down the prices of small cars.

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