Earthquake In Japan Pushes Car Prices Up

I guess this makes some sense, in that reduced volume means that you have to charge higher prices to keep your profit margins going and dampen down demand that you know you cannot meet. But it still seems a little short-sighted to raise prices just when confidence in car makers from Japan has taken a knock.

Apparently dealers selling Japanese cars in China have already raised prices by about 26,000 to 65,000 Yen as supply can no longer meet demand. These price increases are relatively small compared with the extra $2000 0to $3000 USD customers are having to fork out for the Prius in the US. Although Toyota was going to raise prices a little from may as a result of increases in raw material costs and the stronger Yen, these kinds of huge premiums give the impression of price gouging – not something you want to do when consumers are warming to your product due to higher petrol prices.

Sources: Detroit Free Press, Searchina (Japanese-language)