Toyota says it won't raise prices to aid U.S. car sector
Reuters / April 26, 2005
TOKYO -- Toyota Motor Corp. said on Tuesday it would not raise its car prices to help U.S. rivals, breaking with its chairman's comments a day earlier that voluntary price increases and other steps were in order to help restore health to the U.S. auto industry.
"Our basic stance is that prices are something for the market to determine," a spokesman at Japan's top automaker said. "We are not thinking about changing (vehicle) prices in order to help the U.S. auto industry."
Japanese brands collectively grabbed a record 30 percent share of the U.S. auto market last year, and some executives have become more sensitive about how their companies' success would play out at the political level.
At the Detroit auto show last January, Toyota President Fujio Cho and Honda Motor Co. Chief Executive Takeo Fukui said Japanese brands' expansion in the United States should not go unchecked, with Fukui volunteering that the combined share should be kept under 40 percent.
"I'm worried not only about GM but about the entire U.S. auto industry," Toyota Chairman Hiroshi Okuda told a news conference on Monday as the head of Japan's biggest business lobby, the Japan Business Federation. "Automobiles are the symbol of American industry, and if things go wrong there may be some kind of impact.
"As an automaker, we have to think about what countermeasures we can take," Okuda said, adding that technical alliances and voluntary price rises were possibilities.
A top Honda executive, however, mirrored Toyota's official stance that raising car prices to help the competition in North America was out of the question.
"I realize that GM, as well as Ford, are suffering financially," Executive Vice President Koichi Amemiya told a news conference at which Honda reported a fourth straight year of record earnings. "But that doesn't mean you ignore the customer and raise your prices," he said.
Hit by falling U.S. sales and growing costs for employee health care, General Motors last week recorded a first-quarter loss of $1.1 billion, its worst result since the world's biggest automaker nearly went bust in 1992.
Its automotive operations lost almost $2 billion, most of that in North America as it offered thousands of dollars in sales incentives per vehicle to lure customers back. Even then, GM surrendered more sales to Asian brands, especially in the light trucks segment, its main cash cow.
Ford Motor Co. had a 38-percent drop in quarterly earnings and cut its North American production to reduce bloated inventories of unsold vehicles.
In contrast, Toyota is expected to follow Honda and second-ranked Nissan Motor Co. in reporting its best-ever earnings for the year that ended last month.
GM Chairman and CEO Rick Wagoner has repeatedly complained that the yen is too weak against the dollar, giving Japanese automakers an unfair edge.
Toyota and Honda have argued that they are building more than half of their cars sold in the United States locally, creating jobs for Americans.
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