The flow of money back into Japan to support rebuilding after an earthquake and tsunami devastated parts of the country has produced yet another aftershock – this time in the currency markets.
The huge amounts of money going back to Japan has caused the Japanese Yen to strengthen as it now is trading well below ¥90:$1. Current Japanese automaker business plans were set at roughly 96 Yen to the U.S. Dollar, and even at that rate executives said profitability was a struggle. Toyota made the price increase decision before the earthquake.
Yesterday the Yen closed at ¥84:$1 in currency trading. This compounds the financial troubles at Japanese automakers already reeling from the loss of income caused by widespread and ongoing plant shutdowns after the Japan earthquake of 11 March 2011.
Yesterday Toyota Motor Sales, the U.S. branch of Toyota Motor Corporation, announce price increases for most 2011 Toyota, Scion and Lexus models effective with May 2011 production. Other Japanese makers will likely follow on Japanese made models.
Toyota’s manufacturer suggested retail price (MSRP) increases range from $65 to $900 or 0.4% to 2.1%, not including hefty delivery fees approaching $1,000 for larger vehicles. It is an unwelcome development for Toyota in the U.S., which was the only major automaker to post flat 2010 sales numbers in a market that on average increased 11%.
