A lot has been said about the earthquake in Japan, and what it will do to car prices. With production shut down for weeks and still not back up to full speed, pundits have said prices are going nowhere but up.
To a certain extent, that's true: Most of the automakers have raised car prices by several hundred dollars over the past few weeks. All automakers are suffering from some level of parts shortages, with some carmakers short on certain paint colors and others looking for alternative sources for electronics parts.
But even the hardest-hit automakers realize American consumers want deals. This week, Nissan and Toyota said they are getting back into offering rebates and incentives to their customers.
Japanese automakers have been hardest hit from the quake's effects, with some of their plants closed for more than a month because their network of parts suppliers was hurt from the quake. Prices are increasing because dealers are trying to hang on to their supply, worried they won't get cars from the automakers in June, July and August.
Prices have gone up about $350 on average since March, says Edmunds.com. Notable price increases include:
• Toyota Camry, up $120
• Toyota Corolla, up $220
• Toyota Prius, up $50
• Honda Accord, up $480
• Honda CR-V, up $300
• Honda Pilot, up $330
• Ford Fusion, up $150
• Chevy Malibu, up $50
• Chevy Cruze, up $120
• Mazda3, up $200
Prices could fluctuate in the next few weeks and months, says Jeremy Anwyl, CEO of Edmunds.
"One big question as we enter the summer selling season is how the collision between car buyers looking for seasonal deals and carmakers raising prices will all play out," he says. "This should become clearer over the next few months, but I would expect the market to achieve a better balance of pricing to demand."
In Toyota's case, the decision to offer rebates again is a move to keep customers from trading into a competitor's car. Nissan is hoping to steal sales from its Japanese rivals, who have been harder hit from the earthquake and tsunami.
In a memo sent Thursday to dealers, Nissan North America Vice President Al Castignetti said Nissan is in a "much healthier position" than Toyota Motor Corp. and Honda Motor Co. in terms of U.S. inventory. That's because its factories in Japan and North America have recovered more quickly from damage and supply shortages. The automaker plans to offer more aggressive incentive deals toward the end of May to capture customers.
"We have the opportunity to collectively 'rev the Nissan engine' and grow market share beginning this month," Castignetti wrote in the memo.
Toyota, which also lowered incentive spending last month to conserve supplies, plans to offer more deals starting this weekend, spokesman Mike Michels said. Deals will vary by region. Toyota spent an estimated $1,625 per vehicle on incentives in April, down 18 percent from March, according to leasing tracker TrueCar.com.
Toyota says it's planning to ramp up North American production quicker than it had expected, returning to 70% of normal production by June.
Some plants will be back at 100% production: Popular cars like the Camry, Corolla, Avalon, will be back at full speed. Small cars, which are seeing higher demand due to increasing gas prices, will also be back up, like the Matrix and the Venza. Toyota is also returning to normal production on bigger vehicles like the Highlander and Sequoia and Sienna minivan.
Bottom line
Predictions that dealers would be left with empty lots and nothing to sell customers are not yet panning out, and automakers realize they need to lure customers back with rebates.
Contributing: The Associated Press
To a certain extent, that's true: Most of the automakers have raised car prices by several hundred dollars over the past few weeks. All automakers are suffering from some level of parts shortages, with some carmakers short on certain paint colors and others looking for alternative sources for electronics parts.
But even the hardest-hit automakers realize American consumers want deals. This week, Nissan and Toyota said they are getting back into offering rebates and incentives to their customers.
Japanese automakers have been hardest hit from the quake's effects, with some of their plants closed for more than a month because their network of parts suppliers was hurt from the quake. Prices are increasing because dealers are trying to hang on to their supply, worried they won't get cars from the automakers in June, July and August.
Prices have gone up about $350 on average since March, says Edmunds.com. Notable price increases include:
• Toyota Camry, up $120
• Toyota Corolla, up $220
• Toyota Prius, up $50
• Honda Accord, up $480
• Honda CR-V, up $300
• Honda Pilot, up $330
• Ford Fusion, up $150
• Chevy Malibu, up $50
• Chevy Cruze, up $120
• Mazda3, up $200
Prices could fluctuate in the next few weeks and months, says Jeremy Anwyl, CEO of Edmunds.
"One big question as we enter the summer selling season is how the collision between car buyers looking for seasonal deals and carmakers raising prices will all play out," he says. "This should become clearer over the next few months, but I would expect the market to achieve a better balance of pricing to demand."
In Toyota's case, the decision to offer rebates again is a move to keep customers from trading into a competitor's car. Nissan is hoping to steal sales from its Japanese rivals, who have been harder hit from the earthquake and tsunami.
In a memo sent Thursday to dealers, Nissan North America Vice President Al Castignetti said Nissan is in a "much healthier position" than Toyota Motor Corp. and Honda Motor Co. in terms of U.S. inventory. That's because its factories in Japan and North America have recovered more quickly from damage and supply shortages. The automaker plans to offer more aggressive incentive deals toward the end of May to capture customers.
"We have the opportunity to collectively 'rev the Nissan engine' and grow market share beginning this month," Castignetti wrote in the memo.
Toyota, which also lowered incentive spending last month to conserve supplies, plans to offer more deals starting this weekend, spokesman Mike Michels said. Deals will vary by region. Toyota spent an estimated $1,625 per vehicle on incentives in April, down 18 percent from March, according to leasing tracker TrueCar.com.
Toyota says it's planning to ramp up North American production quicker than it had expected, returning to 70% of normal production by June.
Some plants will be back at 100% production: Popular cars like the Camry, Corolla, Avalon, will be back at full speed. Small cars, which are seeing higher demand due to increasing gas prices, will also be back up, like the Matrix and the Venza. Toyota is also returning to normal production on bigger vehicles like the Highlander and Sequoia and Sienna minivan.
Bottom line
Predictions that dealers would be left with empty lots and nothing to sell customers are not yet panning out, and automakers realize they need to lure customers back with rebates.
Contributing: The Associated Press
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