Toyota has announced an average price increase of $270 across some models in July. Lexus prices will also increase by an average of $208. This isn't much of a surprise, given the Trump Administration's on-again, off-again tariffs. However, Toyota denies that the increase has anything to do with tariffs.
"The latest price hike is part of our regular review of the prices," Nobu Sunaga, a Toyota spokesperson, told Reuters. Meanwhile, Mitsubishi stopped shipments to dealers altogether, Ford has raised prices on vehicles made in Mexico, Hyundai has considered a 1% increase across the board, Nissan desperately wants to make a deal, and Audi is trying to ignore the whole thing. Is Toyota following Audi's lead?
Not at all. Although Toyota is a Japanese company, it is also a major domestic manufacturer, with 11 factories in the United States. Models like the Camry, Tundra, Highlander, and Sequoia won't be hit as hard by tariffs because they're built here rather than in Japan. About half the vehicles Toyota sells in the U.S. are built in the U.S.
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However, the other half of Toyota's vehicles, including the 4Runner, Tacoma, Prius, and most of the Lexus lineup, are still imported and subject to tariffs, which would add thousands of dollars to their prices. A price hike of a few hundred dollars seems more like a standard market adjustment than compensation for tariffs.
Toyota is all too aware of the looming tariffs, but is taking a wait-and-see approach when it comes to pricing and production decisions, according to MotorTrend. Executives say they are thinking in the long term, but this is extremely difficult when the tariffs change as frequently as they have been. Toyota is hoping to negotiate some trade deals, and as the world's largest automaker, it is in a good position to do that.
Another reason for this approach may be political. Companies like Walmart have come under heavy criticism from the Trump administration after announcing that tariffs would cause price increases. Unlike other automakers, Toyota may be avoiding making any statements about tariffs that Trump could interpret as negative. That would put Toyota in a better position to make a deal that would help keep prices down.
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