Quality is key for customers searching for the right car, but price also remains a priority.
And price is especially significant this year given that most Japanese automakers have raised prices on vehicles sold in the U.S. because of the high value of the yen.
American distributors of the Japanese cars must convert U.S. dollars to yen to pay the manufacturers for shipments sent here.
When the yen appreciates, it narrows the exchange-rate gap. So for each dollar converted, fewer yen are sent home. To make up for that shortfall, prices are raised in the U.S.
The Japanese also are producing more cars at plants in the U.S. such as Georgetown, Ky.’s Toyota Motor Manufacturing USA Inc., where the Camry is made and very soon the Avalon.
“They (Japanese carmakers) have had quite a price increase, where I think the domestics have been holding their own,” said Robert H. Newberry, executive vice president of the Kentucky Automobile Dealers Association.
But it’s still too early to tell the effect on sales, he said.
Some American-based car manufacturers have capitalized on the Japanese dilemma by holding prices or only slightly raising them for 1994. Cadillac and Pontiac are among them.
Even Germany’s Mercedes-Benz said it will hold the line on prices of some models for 1994 while reducing the stickers on others.
The new Mercedes C class will underprice the rival Lexus ES300 sedan by about $1,000, and the E class sedan will be about $7,400 less than a Lexus LS400 sedan.
