Prices of Toyota, Lexus up by 4% to 16% from January 2016

Kuala Lumpur: UMW Toyota Motor Sdn Bhd has announced that the company will be increasing the price of its Toyota and Lexus vehicles by 4% to 16% across all models from January 2016, due to the falling ringgit against the US dollar.

This move is implemented to counter the sharp depreciation of the Malaysian ringgit against the US dollar, the world’s default trading currency. MYR is currently Asia’s worst performing currency, facing a 20% fall this year-to-date, thus increasing cost of operations, UMWT said.

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In a statement today, the car manufacturer said that these strategic moves are taken to protect the interest of its customers in the middle of this fluctuating ringgit, the company has been absorbing additional costs to a certain extent over the past months, but now it was high time to take the decision.

IMAGE COURTESY: themalaysianinsider.com

UMW Toyota said, “It has weighed all possible options but has no choice except to pass on some costs to the consumers to offset rising input costs due to the strengthening of the US dollar against the local currency.”

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UMWT president Datuk Ismet Suki, said “Since the beginning of this year, the fluctuation of the ringgit has impacted our business as some of our parts and components are imported, resulting in an increase in overall cost of production. We have implemented cost-efficiency measures and reviewed our operations across the supply chain to mitigate the weaker ringgit.”

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He further added that “The company would have implemented necessary measures to minimize forex losses impact and address the fluctuation of ringgit if it dropped gradually. Unfortunately, the sudden and huge fluctuation of ringgit within a short period has given great impact to our operations. Hence, the company will have to increase the prices of Toyota and Lexus vehicles effective January 2016. The increase is inevitable as there is no clear indication on when the ringgit will rebound.”

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Datuk Ismet Suki said, “We have tried our level best to keep the price increase as minimal as possible although with the increase, With the increase of our vehicle price, we could only recover partially, not 100% from the impact we have been absorbing. If the ringgit continues to slide in the near future, we may need to review our pricing structure again.”

Although, the UMWT president is optimistic that the price increase would not have a big impact on sales, with UMW Toyota currently on track to meet its business targets.

“We are facing challenging times, but UMW Toyota is confident we can ride out the storm. We have strong fundamentals and a proven track record. I believe customers will continue to choose us and our vehicles as we deliver quality products and services that complement their lifestyles,” he said.

As per August 2015, the Japanese automaker has accounted for a total of 15% market shares among its various marques, according to Malaysian Automobile Association.

The company has released estimated price up OTR figures along with the statement. It is evident from the table above that Toyota's cheaper cars to have a smaller raise like Vios with a 4% while its upper model range with a significant impact like the Alphard which could go up to 16%. UMWT's take to rise price is being considered as an intelligent move in this quarter to give a sales boost.